Whilst you don’t fairly want a six-figure wage, it comes shut.
Nashville, TN, isn’t just the Music Metropolis; it’s additionally residence to a thriving actual property market that’s seen important progress lately. For a lot of, shopping for a house in Nashville is a dream come true, however it’s additionally vital to know the way it will affect your funds. From down funds to month-to-month mortgage funds, there’s so much to grasp earlier than shopping for your first residence
So whether or not you already reside in Music Metropolis or want to relocate to the world, right here’s a breakdown of the revenue you’ll have to buy your first residence in Nashville.
Take a look at our unique report for an in depth nationwide evaluation.
How a lot revenue do that you must purchase a starter residence in Nashville?
The median sale value of a starter residence in Nashville is $315,000. To be able to afford this, first-time homebuyers in Nashville ought to make $98,314 per yr, up 7% from 2023. Nonetheless, the median revenue in Nashville is $91,252, that means the standard resident typically can’t afford a starter residence.
As anticipated, starter properties in Nashville are way more reasonably priced than the typical residence (all value brackets mixed; see methodology for particulars). To be able to afford any median-priced residence within the space, you’ll have to make $124,095 (as of October 2023).
Nationwide, you want an revenue of $75,849 to afford a typical starter residence, which prices a mean of $240,000. The typical U.S. family earns an estimated $84,072.
First-time homebuyers’ information to the Nashville housing market
Nashville has seen great progress lately – particularly because the pandemic – as folks have been searching for sunshine and affordability. In reality, the town has been amongst the preferred migration locations since 2021. This inflow has boosted home costs by almost 30% since January 2021, from $335,000 to $475,000 in April 2024.
Town is residence to many world-class facilities positioned all through its various neighborhoods. Some in style neighborhoods in Nashville embrace East Nashville, Germantown, and Midtown. From the Parthenon and the Grand Ole Opry to Music Row and the Ryman Auditorium, there are such a lot of nice causes to name Nashville residence.
What does a typical down cost appear like for a starter residence in Nashville?
Listed below are some frequent down cost quantities for a typical $315,000 starter residence in Nashville:
Down cost proportion | Down cost quantity |
3% down cost | $9,450 |
3.5% down cost | $11,025 |
5% down cost | $15,750 |
10% down cost | $31,500 |
15% down cost | $47,250 |
20% down cost | $63,000 |
Down funds can vary from 0% to 100% of the full home value, relying in your finances, mortgage sort, and long-term priorities. Whereas specialists have traditionally beneficial budgeting for a 20% down cost, the growing value of properties and continued sluggish wage will increase has led to a 15% down cost turning into extra frequent.
Some mortgage sorts enable for decrease down cost quantities. For instance, a Federal Housing Administration (FHA) mortgage requires simply 3.5% down, whereas the bottom potential down cost for a standard mortgage is 3%. These quantities usually rely in your credit score scores, so patrons with increased credit score scores might qualify for decrease down funds.
What’s the typical mortgage cost for a starter residence in Nashville?
The standard month-to-month mortgage cost for a starter residence in Nashville is $2,458. This assumes you place 3.5% down and have round a 7% rate of interest.
If this cost sounds too excessive, you could possibly take into account renting an house in Nashville. The typical hire value is $1,923, presumably making it a greater choice when you save for a down cost on a home. You can too use an affordability calculator to see what you may afford primarily based in your revenue and down cost.
What must you do subsequent?
When you’re out there to your first residence in Nashville, it’s vital to grasp how a lot home you may afford. Take your annual revenue, credit score rating, the present mortgage charges, and native market traits to decide that works greatest for you.
From there, a Nashville agent can assist you navigate all the residence shopping for course of and supply invaluable native experience. To study extra about tips on how to purchase a house, try Redfin’s First-Time Homebuyer’s Information.
Methodology
Redfin defines “starter properties” as properties whose sale value fell into the Fifth-Thirty fifth percentile of the Redfin Estimate tier. For context, Redfin divides all U.S. properties into 5 buckets primarily based on Redfin Estimates of properties’ market values. There are three equal-sized tiers, in addition to tiers for the underside 5% and high 5% of the market.
We calculated the annual revenue wanted to afford a starter residence by assuming a purchaser spends not more than 30% of their revenue on housing funds. Housing funds are calculated assuming the customer made a 3.5% down cost and likewise take a month’s median sale value and common mortgage-interest fee into consideration.
The nationwide revenue information is adjusted for inflation utilizing the Client Worth Index. 2024 revenue is estimated primarily based on projections from the U.S. Census Bureau’s (ACS) 2022 median family revenue utilizing the 12-month transferring common nominal wage progress fee. The speed was compiled from the Present Inhabitants Survey and reported by the Federal Reserve Financial institution of Atlanta.
We assume housing funds embrace the mortgage principal, curiosity, property taxes, owners insurance coverage, and mortgage insurance coverage (when relevant).
All information sourced February 2024 except in any other case said.