If you’ve payed any attention to the real estate market in the Murfreesboro area, you’ve likely noticed that January felt a little sluggish. Now that the official numbers are in, let’s break down what happened, why it happened, and what might be coming next! Plus, we'll clarify some of the confusion between the Federal Reserve rate and mortgage rates. It's all here in ‪our February 2025 look at the Rutherford County, TN housing data.



January's Bleak Numbers

• Home Sales Down 18%
  Compared to January of last year, home sales dipped by about 18%. This decline reflects contracts that were mostly written in December, which saw mortgage interest rates inch up. Higher rates often dampen buyer enthusiasm, leading to fewer closed sales. Couple that with an already seasonally slow month, and you get 279 closed sales, the lowest number in a single month since we started tracking the granular data over 6 years ago. 

• Pending Contracts Down 9%
  Pending contracts (homes under contract but not yet closed) dropped by 9%. On top of higher rates, we had about a week of harsh snowy weather in January, making it a challenging month for buyers and sellers to connect.

• Price Per Square Foot Down Dramatically
  Median Price Per Square Foot dropped sharply from $220 in December to $212 in January. That's the lowest it's been since January of 2023. However, we do expect that to pick back up this month with inventory having risen 76% in a single month, coupled with rates softening for their third consecutive week. It is evident from our "boots-on-the-ground" that buyer activity is picking back up. So look for prices to follow that same trend.

It's All About The Rates

If there’s one major factor driving the ebbs and flows of our local real estate market, it’s interest rates. Here’s what you need to know:

• Conventional Rates
  When conventional rates fall into the 6% range—especially the mid-6s—buyer activity tends to pick up noticeably.
• FHA & VA Rates
  These are usually about half a point lower than conventional rates, so even if conventional rates are in the high 6s, FHA and VA borrowers might see something in the mid-6 range.
• Tied to the 10-Year Treasury
  The 30-year mortgage rate is tied more closely to the 10-year Treasury yield than to the Federal Reserve’s rate. A quick rule of thumb: Add roughly 2.5% to the 10-year Treasury yield to estimate the conventional mortgage rate on a given day.

Understanding the Fed Rate vs. Mortgage Rates

There’s often confusion between the Federal Reserve rate and mortgage rates. While they can move in tandem, they aren’t directly linked:

• Fed Rate
  This is the commercial rate at which banks lend to each other. It affects short-term and commercial lending (think credit cards, auto loans, and commercial real estate), but not 30-year residential mortgages directly.
• 10-Year Treasury
  The 30-year fixed mortgage rate tracks with the 10-year Treasury yield, which can move independently of the Fed’s decisions. Sometimes the Fed lowers rates, and mortgage rates still rise if the Treasury market reacts differently to economic news.

Looking Ahead

We all wish we could control the market, but the reality is that our role as your local real estate professionals is to guide you with the best information available. Here’s how John Jones Real Estate can help:

1. Market Insights – We stay up to date on hyper-local trends and rates so you don’t have to.
2. Pricing Strategy – If you’re selling, we help you position your home competitively based on current market conditions.
3. Buyer Guidance – For buyers, we help you navigate financing options and watch mortgage rates closely to find the optimal time to lock in a lower rate.

Need Real Estate Advice?

If you’re thinking about buying or selling, need advice on who to call to fix that leaky faucet, who to paint that pink bedroom that used to be cute but isn't "cool" anymore, or maybe you just want to know how your current property has appreciated, give us a call at 615-867-3020. We’re here to keep you informed, offer honest advice, and help you navigate whatever the market throws our way.