In less than a decade, you won't be able to afford a home in Cookeville, Tennessee

In less than a decade, you won’t be able to afford a home in Cookeville, Tennessee.

Are you dreaming of owning a home in Tennessee? You might want to act fast. As home values continue to rise, once-affordable housing markets are quickly becoming unattainable for many Americans.

To shed light on this growing trend, GOBankingRates conducted a study to pinpoint which major U.S. cities are on track to lose their label of affordability. By projecting the overall U.S. median home value over the next 10 years using Zillow’s September 2022-23 one-year forecast, GOBankingRates compared this projection to the growth rates of 537 U.S. cities with home prices currently below the national median of $356,026. Knoxville, Crossville, Cookeville, and Clarksville are all on the list of major cities becoming unaffordable.

While this projection is based on a single year’s growth rate, it can help identify areas that are outpacing the national average for growth. If you’re considering buying a home in one of these cities, it might be wise to act sooner rather than later before prices skyrocket.

Of course, it’s important to note that Zillow’s estimated home values don’t necessarily reflect list or sale prices in each market. And in some cases, a high growth rate could be an anomaly. But with home values on the rise, it’s essential to keep a watchful eye on the real estate market.

It’s important to remember that there are advantages to buying a home in a market with exponential growth. Buying a house in a city with rising home values can be a smart financial move. As home values increase, so does the equity in your home, which can provide a solid return on investment when it comes time to sell. Additionally, rising home values can indicate a healthy real estate market, which can attract new businesses and create job opportunities, leading to a thriving local economy. Furthermore, owning a home in a city with appreciating home values can provide a sense of stability and security, as you know your investment is likely to increase in value over time. Overall, buying a home in a city with rising home values can offer both financial and personal benefits.

We decided to break down the major cities in Tennessee that made the list. When will they lose their “affordability” status? We answer that question and MORE. 

Clarksville, Tennessee:

• August 2022 home value: $270,758

• One-year projected growth rate: 20%

Clarksville is about an hour’s drive north of Nashville and is located just south of the Kentucky border. About 167,000 people live there, and the average age of residents is 29, the city reports.

When It Will Become Too Expensive:

• Year: 2031

• Projected home value: $1,397,052

• U.S. median projected home value: $1,369,207

• Difference in value: $27,845

• 2032 projected home value: $1,676,462

Crossville, Tennessee:

• August 2022 home value: $262,886

• One-year projected growth rate: 24.1%

In 12,000-resident Crossville, residents can test their physical and mental skills. Known as the Golf Capital of Tennessee, it has nine courses. Crossville is the headquarters of the United States Chess Federation, too.

When It Will Become Too Expensive:

• Year: 2026

• Projected home value: $623,526

• U.S. median projected home value: $616,565

• Difference in value: $6,961

• 2032 projected home value: $2,277,641

Knoxville, Tennessee:

• August 2022 home value: $299,342

• One-year projected growth rate: 23.1%

Knoxville, Tennessee sits at the foothills of Great Smoky Mountains National Park, and is a diverse city known for celebrating its many different ethnicities in festivals and cultural events. This city of over 192,000 people is also home to the University of Tennessee and the Knoxville Ice Bears professional hockey team.

When It Will Become Too Expensive:

• Year: 2024

• Projected home value: $453,611

• U.S. median projected home value: $448,108

• Difference in value: $5,503

• 2032 projected home value: $2,391,928

Cookeville, Tennessee:

• August 2022 home value: $262,204

• One-year projected growth rate: 22.4%

Incorporated in 1903, Cookeville sits almost midway between two of Tennessee’s biggest cities – 101 miles west of Knoxville and 79 miles east of Nashville. Fun fact: According to the local visitor’s bureau, Cookeville is within a day’s drive of 75% of the nation’s population.

When It Will Become Too Expensive:

• Year: 2028

• Projected home value: $881,714

• U.S. median projected home value: $848,350

• Difference in value: $33,364

• 2032 projected home value: $1,979,035

So, should you buy now when rates are high? Or wait?

Let’s break it down. 

If you bought a house right now for $300,000 at a 7% interest rate and put $0 down, your monthly mortgage payment would be $2,259. 

Let’s say you want to wait a year for rates to drop. Homes in The Upper Cumberland region of Tennessee appreciated over 18% last year (it’s projected to be over 22.4%), so the same $300,000 house is now worth $360,000. Let’s say rates miraculously drop to 5.5% and you purchase the house with zero down. Your monthly mortgage payment would be $2,347. 

In 30 years, that $88 difference at a lower interest rate will cost you $31,680 more than if you had purchased a home today. 

If you had purchased the home at a higher interest rate and refinanced for a lower rate in a year, your monthly payment would be UNDER $2,000 and you would have over $60,000 in equity. 

For those considering buying a house, now is a great time to take the plunge. While it's tempting to wait for interest rates to drop, the reality is that they may not decrease significantly anytime soon and with rising home values it likely won’t save you money. By waiting, you risk missing out on the opportunity to purchase a home in a desirable location with appreciating home values. Furthermore, buying a home now can provide a sense of stability and security, as you'll have a place to call your own and build equity over time. Don't let the fear of rising interest rates hold you back from making a smart financial decision. Take advantage of the current market conditions and invest in your future by purchasing a home now.