Nashville rents are increasing at a slower rate. Here’s why it may not feel like it.

Nashville’s rents have started to increase at a slower rate. 

In 2021, Nashville’s rent prices spiked at a 19% increase. Last year, it was a 4.8% increase, according to Apartments.com. Experts are working to learn if this is the start of a post-pandemic trend.  

Throughout the United States, Southern and Western states’ rents rose fastest and rebounded from where they fell early in the pandemic.

A Nashville resident asked WPLN News: “We just moved back after eight years in Ohio. The ‘luxury’ apartment we found exceeds our monthly income by a couple or three hundred dollars. It is sustainable for perhaps eight to 12 years. The burning question is: Will the rents ever go down?? I seriously doubt it.”

What we do know is these four factors impact rental prices: 

1. Housing supply
2. Demand
3. Cost to build
4. Interest rates to finance projects

All four of these are increasing.

So the timing of your lease renewal could impact the rental price you’re offered. A city official says there’s been a small decrease in rents from this past summer, but there could be rent increases for upcoming renewals.

“So all of these trends, to me, suggest whatever decreases we might have are going to be small if, if any, and short-lived in the long-term,” Tennessee State University professor Ken Chilton says.

Chilton can’t make any promises about when prices will decrease. But knowing that Nashville will be home to Oracle and Amazon, which brings in people earning higher incomes, he can confidently say: “We’re not going back to the days where you can find an apartment for $750, $800 a month,” he says.

Chilton also points to reporting from ProPublica that property managers are using an algorithm to drive rent prices up. According to their reporting, those property managers control thousands of apartments locally.

A recent report from Point2Homes shows Nashvillians are earning half the income needed to buy a home, which keeps them renting for longer and further sucks up supply. 

There are other things that impact rents: employment levels, household incomes and what kind of housing people are looking for. Because of all these moving pieces, city officials are analyzing the best way to capture more real-time information on the change of the rental market.