Should first-time buyers wait for interest rates to fall before buying in Nashville?

Waiting for rates to fall can backfire. If mortgage rates decline meaningfully, more buyers rush into the market, which can drive prices higher and increase competition. Many first-time buyers in Nashville choose to buy when they find the right home and payment, then refinance later if rates improve.

Are condos a good option for first-time buyers in Nashville?

Yes. Condos can be a strong entry point for first-time buyers in Nashville, especially in locations where single-family homes have become less affordable. It is important to review HOA health, fees, rules, and investor ratios, but condos often offer lower maintenance and more accessible pricing.

How much cash do I need to buy my first home in Nashville?

Many first-time buyers in Nashville purchase with as little as 3% to 5% down, plus closing costs. Some loan programs and grants can reduce upfront cash requirements even further. A strategy call with a lender and a local realtor can clarify an exact target based on your price range and goals.

What is the biggest mistake first-time buyers make in Nashville?

The most common mistake is waiting too long to prepare. Serious first-time buyers should start planning 3 to 6 months before they want to move, including getting pre-approved, understanding their payment comfort zone, and aligning with a data-driven local agent who understands Nashville micro-markets.

Why 2026 Will Be a Huge Year for First-Time Buyers in Nashville (If You Prepare the Right Way)

Dec 11

Written By Jack Costigan

If you’re a first-time buyer in Nashville, 2026 may be the best opportunity you’ve had in years. While national headlines paint a confusing picture, the hard data shows a very different story — especially for buyers ready to take advantage of rising inventory and stabilizing mortgage rates.

According to Redfin’s latest Housing Market Tracker, inventory across many major U.S. metros has increased year-over-year, giving buyers more options and more negotiating power. Nashville is following a similar trajectory, and that trend is expected to continue into early 2026.

Layer in projected rate stabilization from Freddie Mac’s Mortgage Forecast and cooling competition reported by Realtor.com’s November Housing Report — and the conditions are aligning for first-time buyers to enter the market with far less pressure than in recent years.

Here’s why 2026 is shaping up to be a standout year.

1. Inventory Is Finally Rising — and Buyers Benefit Most

After several years of historic shortages, inventory is trending upward.
Zillow’s latest Market Pulse notes a national increase in active listings, with more sellers returning to the market.

For first-time buyers in Nashville, this means:

More choices within the $350K–$550K range
Less risk of bidding wars
More leverage on inspections and concessions

It’s the first time in nearly five years where buyers aren’t forced to make split-second decisions.

2. Mortgage Rates Are Stabilizing According to National Forecasts

Rates aren’t expected to drop dramatically, but stability is the real advantage.
Freddie Mac and Mortgage Bankers Association both forecast rate stability and a gradual decline into late 2026.

This benefits first-time buyers because you can:

Lock in affordability now
Avoid price spikes when rates fall
Refinance later for a lower payment

Waiting often costs buyers more in the long run — especially in fast-growing metros like Nashville.

3. New Construction Incentives Are Better Than They’ve Been in Years

Builders are responding to the rise in inventory by offering aggressive incentives.
NAHB data shows builder concessions increasing nationally in 2025, including rate buydowns and closing cost credits.

Nashville is no exception.

Incentives like:

2-1 rate buydowns
3–5% closing cost contributions
Free upgrades
More flexible contracts

…create real affordability opportunities for first-time buyers.

4. Renting in Nashville Is Becoming More Expensive Than Owning

Rent increases continue to outpace wage growth.
According to Apartment List’s Rent Report, Nashville rents have risen significantly over the past five years, even with new apartment supply.

Meanwhile, monthly mortgage payments in several Nashville neighborhoods are now equal to — or below — comparable rent, especially when buyers secure concessions or new-build incentives.

5. Nashville’s Long-Term Growth Remains Among the Strongest in the U.S.

Population and economic fundamentals remain exceptional.

According to U.S. Census migration data, Tennessee continues to rank among the top inbound states.

Forbes, WSJ, and CoStar consistently list Nashville as one of the top markets for job growth and long-term housing demand.

This matters for first-time buyers because buying in a growing city accelerates equity, even if appreciation cools in the short term.

Q&A: Real Questions First-Time Buyers Ask Me Every Week

Q: Will Nashville prices drop in 2026?

A: Based on data from Realtor.com’s Housing Forecast, prices may stabilize but are unlikely to drop significantly. Demand remains too strong.

Q: Is it better to wait for interest rates to fall?

A: According to Freddie Mac’s rate forecast, waiting for rates to fall may cause you to miss the window where prices are more negotiable. Buy the home, refinance the rate.

Q: Are condos a smart move for first-time buyers?

A: In many cases, yes. Zillow data shows condos rising slower in price than detached homes, making them more accessible.

Q: How much should I have saved before I start looking?

A: Most first-time buyers enter the market with 3–5% down + closing costs. Programs backed by FHA may allow for even more flexibility.

Q: What’s the biggest mistake you see first-time buyers make?

A: Waiting until the last minute. The buyers who win in 2026 will be the ones preparing now.

About the Author

Jack Costigan is a top-producing Realtor® and founder of The Costigan Group at Compass Nashville, specializing in residential, relocation, investment, and short-term rental real estate throughout Nashville and Middle Tennessee. Known for his modern marketing and data-driven approach, Jack has helped dozens of clients buy and sell homes across Greater Nashville. Learn more at jackcostiganrealestate.com.