Franklin Monthly Real Estate Recap AND 2026 PREDICTIONS: December 2025
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This year has D-R-A-I-N-E-D so many of us. I often hear from people who feel like they're being pulled in a thousand different directions at the same time, in just about every area of life -- financially, emotionally, time-wise, personally and professionally. It's no wonder so many of us have a kitchen counter that looks eerily similar to this right now:
And then to add a home purchase and sale on top of it? A lot of people took a hard pass on moving in 2025. Can you blame them?
For the few who bought a home locally any time this year, though, you are most likely going to feel like the smartest person in the room by the end of 2026.
That's the way most predictions are leaning for next year, anyway.
2026 is expected to be a big year for housing -- A stark contrast to the past couple of year's predictions. Supposedly, home prices will continue to rise in 2026, interest rates are at least expected to stay stable (maybe dip *a bit*) and for the first time since the Covid pandemic, homes are becoming "affordable" again.
But these statements alone are not a great argument for why 2025 was so good to buy.
Hear Me Out
Why Buyers won in 2025...
What makes them so special...
What in the world happened that didn't become a trend...
The number one reason....
BECAUSE NO ONE ELSE WAS BUYING.
There was such little competition among Buyers in 2025 that for the ones who could make the numbers work, or had the energy or were persistent, they got pretty much everything they wanted. And it took A LOT of work. I'm not down-playing at all how complicated 2025's Real Estate market has been.
But what's important for you to know is 2026 is expected to be a tad easier, smoother and quicker. And because of that, there will likely be more competition.
What's Supposed to Change?
I've said since 2022 that there are three elements that determine affordability in Real Estate -- and at least one of these elements will need to improve for us to pick up pace again across the country:
- Home Prices need to decrease
- Mortgage Interest Rates need to decrease
- Wage Growth needs to increase
After a sluggish three years... we are finally seeing movement in all three categories.
Locally in Greater Nashville, the home price category has shown us the least amount of change. You can see in the charts below (one for Greater Nashville and one specifically for Williamson County), we've basically had a wash in year-over-year home sale prices with slightly higher prices in Williamson County. Some months this year were incredibly higher from the same time in 2024. But then other months were slightly below the same month of the previous year. Many months were neck-and-neck on home prices. Overall for the year, we are on track to finish with a 3.5% gain in home prices in 2025 versus 2024 in Williamson County.
BUT -- Seeing only a 3% bracket gain in home prices over the past year is a huge improvement from the years we saw 10%, 15% or more home price growth. So though we haven't necessarily had a decrease in prices, we've seen a decrease in the rate of growth, WHICH IS HUGE, especially as incomes are increasing at a higher rate.
The red dots represent 2025, the blue dots are 2024. The black dots are 2023. You can tell there is a major difference between 2023 prices locally and 2024 prices. But 2024 and 2025 are all hovering around the same marks together.
Thanks to Real Estate industry data firm BAM for putting together the gold graph below, showing expectations for 2026 price growth. Nationwide, of almost a dozen Real Estate data companies, only one (Mortgage Bankers Association) is predicting a home price decrease for 2026. And even that prediction only reflects 1/3 of a percent "dive". To put that into perspective, on a median priced home of $500,000 in Davidson County, that's a $1,500 dip in price. One thousand five hundred dollars. In Williamson County, that would be about a $3,000 decrease from today's $1,006,000 median price. So our outlier worst-case-scenario is nothing to write home about.
You can see the remaining institutions, which include Zillow and Realtor.com, are all expecting home price gains in 2026. Personally, I think 4% is an incredibly generous prediction, but 1-2% sounds realistic. That's $5,000-$10,000 growth on a half-million dollar home, and about $10,000-$20,000 on a million dollar home.
There are pockets across the country that will see lower dips and higher gains, but here in Middle Tennessee, I think slight growth of 1-2% is realistic and welcome, especially as wages rise at a higher rate.
But before we get to wages, let's talk about Mortgage Interest Rates.
This is the second data point that we needed to see decrease... and it has. According to Mortgage News Daily, almost every product of mortgage interest rates has dropped by almost a percent from the highest rate in a year -- and a 2% decrease since 2023's peak. You can see rates have started to stabilize since the start of this November. They are expected to continue to stay hovering around the 6% mark (some slightly higher, some slightly lower) throughout the entire year of 2026.
But even that is okay, as Buyers find comfort in stability. The volatility we saw in rates for the first ten months of 2025 -- especially in the first quarter -- makes purchasing anything uneasy. It's no surprise that as mortgage interest rates have become more consistently favorable and steady, that this has influenced an increase in Buyer demand.
And the cherry on top -- and perhaps the largest influence in Buyer demand as we've finished out 2025 -- is an increase in wage growth.
Wage growth has consistently outpaced home prices gains over the past year.
The National Association of Realtors reports that in Q3 2025, typical American families spent an average of 24.8% of their income on mortgage payments.
In Q3 2024, that number was 25.6%.
In Q3 2023, that number was 25.2%.
The number of homes going Under Contract continues to post year-over-year gains locally. According to Case-Shiller, home prices continued to rise at less than the rate of inflation.
And in November, jobless claims fell to their lowest reading since April -- well below levels that signal a recession.
As of October, the Mortgage Bankers Association reported homebuyer affordability improved for the fifth straight month. Safe to say that trend is continuing. As of the first week of December, MBA reported that purchase mortgage applications had risen 17% from the same time last year, sending Buyer demand to its highest level of the year.
My 2026 Local Real Estate Predictions
I'm seeing the single busiest November and December than I have EVER had in my personal Real Estate business. I get a new text, email or phone call from new Buyers and Sellers entering the market almost every day.
Typically people slow it down for the holiday season and my phone starts ringing again for Spring market on January 2nd. And while I do expect an increase in calls on January second 2026, I've never gone into a January with so much already going on in November and December.
And it's not just me. MBA noted that home-buying nationwide got off to its strongest November start in THREE YEARS. Mortgage purchase applications increased by 31% from November 2024 to November 2025.
However, I've heard from Buyers who are *still* holding out hope that prices are coming down significantly in 2026 -- some citing an expectation that with monthly rent prices expecting to decrease, we'll see the same for home prices. But the exact opposite tends to happen. Rental prices go up when they are in demand, often times due to housing being unaffordable to purchase (like what we saw in 2025). With the expectation of rental prices going down, it's safe to say there is an expectation of less rental demand because more people will be buying homes instead.
These are all leading indicators, and they all point in the same direction. 2026, though showing promising signs of more affordability, will likely show more competition among Buyers because of it. The best strategy if you're a Buyer in 2026 is to get out ahead of the crowd just like the Buyers in 2025. Start putting in offers in January and February.
If you're planning to be a Seller in 2026... all of this information is so incredibly good for you to know. Hang tight, your time is coming again soon. Start preparing NOW, and plan for an early Spring launch.
A new survey found that among Buyers and Sellers planning to enter the market soon, almost 90% think 2026 is the year to do it.
Don't make yourself sick by missing another good Real Estate market.
Want a personalized market valuation for your home? I'm always happy to talk Real Estate!
Schedule a chat with me ASAP: Click this Link!
Thinking of moving? Need a plan tailored to your needs? I'd love to help you. I'm a Franklin resident and a Multi-Platinum Award-Winning Williamson County REALTOR ranking in the top 1.5% of agents locally. I am a top producer within Benchmark Realty, the largest brokerage in Tennessee and among the largest in the country. My continuing education includes several designations and my experience keeps me up-to-date with fast-changing market trends. I am a Million-Dollar GUILD Member of the Luxury Home Marketing Institute, my market insights are regularly featured in broadcast media, and my success planted me on the front page of a December 2021 Nashville-area Magazine. But most importantly, I specialize in helping my friends and neighbors buy and sell homes. Why look further when you've got a friend and neighbor who is among the best in the business!?
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