The Atlanta Fed Examines Housing Affordability Challenges in Music City

Since the pandemic, home ownership affordability has emerged as a major challenge for the Nashville metro area. In July 2025, the Atlanta Fed's Home Ownership Affordability Monitor (HOAM) showed that the median home sales price in Nashville surpassed its most recent record, peaking at just under $480,000. Though only up slightly from a year ago, this figure was 62 percent higher than the median home sales price in July 2019, just before the pandemic, and it coincides with a softening demand for home sales. Housing in Nashville is amongst the most expensive in the Sixth District outside of Florida, just behind Key West, Naples, and Miami (see figure 1).

Figure 1: Highest Median Home Sales Prices for Sixth District Metro Areas

Note: Data indicate prices as of July 2025.
Source: Atlanta Fed's Home Ownership Affordability Monitor and Zonda Intelligence

Rapidly rising home prices have had significant economic consequences for the Nashville region. The Atlanta Fed's Regional Economic Information Network (REIN) team in Nashville meets with large and small firms in Tennessee to gather their perspectives on the current economic landscape. For a few years now, contacts have reported that housing is an acute issue for their workers. Nashville, like many other cities in the Southeast, experienced rapid economic and population growth during the pandemic. Although affordable housing shortages were emerging in the years preceding 2019-22, the pandemic years brought these concerns to the forefront of employers' minds.

At the time, Nashville-with a reputation for ample skilled workers and an affordable standard of living-was an attractive city for both employees and firms. As new companies and their employees relocated to the metro area, the rapid growth pushed housing prices to record highs.

As home prices have increased, incomes have not kept pace. In July, Atlanta Fed's HOAM showed that a household making the median income in Nashville, around $90,500, would need to spend 46 percent of its annual income to own the median-priced home in the region, well above the 30 percent share of income considered affordable, according to US Department of Housing and Urban Development. Figure 2 The HOAM tool shows this trend.

Figure 2: Share of Income Needed to Buy a Median-Priced Home in the Nashville Metro Area

Source: Atlanta Fed's Home Ownership Affordability Monitor

To fall within the 30 percent affordability threshold, a household in the Nashville area would need to make around $138,000 annually, or 54 percent higher than the current median income. Figure 3 compares the income necessary to spend 30 percent for a median-priced home (often called "qualifying income") to actual median income ($90,595) as of July 2025. Beginning in 2022, a growing gap separated these figures.

Figure 3: Median Income versus Qualifying Income in the Nashville Metro Area

Source: Atlanta Fed's Home Ownership Affordability Monitor

Markets closer to Nashville's core metro area (for example, Davidson County) have become the most expensive, while the more affordable housing supply has been pushed farther into the region's outer markets. For example, the median home sales price in Williamson County, located just south of the urban core, reached nearly $900,000 in July, and the median income household in the county would need to spend 55 percent of its annual income to afford to live there. Meanwhille, in Smith County, located 55 miles east of the urban core, the median home price was around $290,000 in July, which is 38 percent of the median household income in the county. Figure 4 shows the median home price by county in the greater Nashville area as of July 2025.

Affordability issues have been felt most acutely among low- and middle-income employees, who are forced to live farther away from the urban core and employment centers. Employers note that this in turn exacerbates other economic constraints the city faces, such as an accessible transportation infrastructure, a well-staffed school system, and easy access to childcare. Some contacts have shared that to counter these problems, they have begun working directly with developers to build or subsidize housing for their lower-income employees who are relocating to the more rural, outer edges of the metro area. Some other contacts report partnering with developers to guarantee high utilization rates for apartment buildings where employees' housing options are limited.

Additionally, 30 colleges are located within 15 miles of Nashville, and housing cost increases have had an direct impact on this large student population. One postsecondary education contact described limitations to enrollment associated with housing their students, since the relatively high cost of rental housing in Nashville pushes nearly all of their students to seek on-campus housing, constraining both the students' access to affordable housing and limiting the college's ability to grow enrollment.

Beyond lower-income and student populations, REIN contacts employing primarily white-collar workers also expressed concern about Nashville's housing affordability. Firms have found it increasingly difficult to fill highly skilled positions in the past 12 to 18 months as applicants to these roles note the rising unaffordability of housing as a disincentive in relocating to Nashville. These contacts also share increasing concern regarding rising property taxes for current employees. However, these firms are careful to note that Nashville remains a popular city to host their operations.

The lack of affordability is beginning to have an impact on housing demand in the region. According to Redfin, a real estate data provider, home sales in the Nashville region were down 19.4 percent compared to July 2024. At the same time, inventory was up 15 percent over the same period, and only a fraction of homes sold above the list price, a sign of weaker demand.

These trends paint a picture of rapid economic growth alongside serious challenges in housing access and affordability in one of the Sixth District's most vibrant locations.

In conjunction with a 2022 Fed Listens event, Nashville's expanding economy received attention in this article. Now, Atlanta Fed president Raphael Bostic returns to Nashville for an in-person district visit October 6-7 to meet with community leaders and explore the intricacies of the local economy. He will be presenting a fireside chat at Fisk University on October 7 from 9 a.m. to 10 a.m. (CT), which will be livestreamed from the Atlanta Fed's YouTube channel. We encourage you to tune in.

The figures in this article come from the Atlanta Fed's Home Ownership Affordability Monitor (HOAM), which covers 400 markets in the United States. HOAM provides a monthly measure of the median-income household's capacity to afford the median-priced home at the national, metro, and metro-county levels. Please explore the many facets of this tool on our public website and subscribe in the "Data and Analysis" section to receive updates.

Do you see something interesting in the HOAM data or trends that you would us to explore? Please email us at [email protected].

By Domonic Purviance, a subject matter expert in the Atlanta Fed's Supervision and Regulation Division, and Justin Shadley, a senior business analyst on the REIN team in the Nashville Branch of the Atlanta Fed