High mortgage rates coupled with shifting local supply-and-demand dynamics have driven down list prices across America.
Houses are being listed for less to sell faster as the United States continues its shift into a buyer's real estate market. In Tennessee, the average time a home spent on the market in August was 62 days, making it one of the longest sale periods for homes in years.
In response to the longer sales period, median list prices and price per square foot have decreased across many Tennessee metros, but none has dropped as much as Memphis, which recorded one of the largest declines in the nation.
August marked the 10th consecutive month in which price per square foot, a measure that adjusts prices for home size, decreased. Nationally,
price per square foot on newly listed homes is down 1.8% year over year. Median list prices fell 2.6% in the South.
Here's how much Memphis home prices dropped in August.
Memphis among cities with the largest price drops
Among the measured metro areas in Tennessee, Memphis had the largest year-over-year decrease in price per square foot along with the lowest overall price. Of the state's nine largest metro areas, five saw a decrease in price per square foot, and four saw an increase.
Metros in Tennessee where the price per square foot went down year-over-year in August:
- Memphis, Tennessee-Arkansas-Mississippi: Prices dropped 4.1% to $153 per square foot.
- Chattanooga, Tennessee-Georgia: Prices dropped 1.8% to $210 per square foot.
- Nashville-Davidson-Murfreesboro-Franklin, Tennessee: Prices dropped 0.8% to $259 per square foot.
- Clarksville, Tennessee-Kentucky: Prices dropped 0.5% to $189 per square foot.
- Cookeville, Tennessee: Prices dropped 0.3% to $209 per square foot.
Metros in Tennessee where the price per square foot went up year-over-year in August:
- Johnson City, Tennessee: Prices increased 1.9% to $208 per square foot.
- Knoxville, Tennessee: Prices increased 1.4% to $234 per square foot.
- Kingsport-Bristol, Tennessee-Virginia: Prices increased 1% to $180 per square foot.
- Jackson, Tennessee: Prices increased 0.4% to $159 per square foot.
Cities with the largest decline in list prices
Memphis had the third-largest percentage decline in listing price per square foot in August 2026 compared with August 2025.
- Austin-Round Rock-San Marcos, Texas: Median list price dropped 8.1% to $450,000.
- Tampa-St. Petersburg-Clearwater, Florida: Median list price dropped 5.6% to $391,950.
- Memphis, Tennessee-Arkansas-Mississippi: Median list price dropped 4.1% to $299,995.
- San Francisco-Oakland-Fremont, California: Median list price dropped 3.9% to $908,700.
- San Antonio-New Braunfels, Texas: Median list price dropped 3.6% to $324,450.
- Denver-Aurora-Centennial, Colorado: Median list price dropped 3.4% to $574,913.
- Baltimore-Columbia-Towson, Maryland: Median list price dropped 3.2% to $375,000.
- San Diego-Chula Vista-Carlsbad, California: Median list price dropped 2.7% to $899,000.
- Orlando-Kissimmee-Sanford, Florida: Median list price dropped 2.6% to $417,000.
- Portland-Vancouver-Hillsboro, Oregon-Washington: Median list price dropped 2.4% to $595,000.
Why are house prices beginning to drop?
Realtor.com senior economist Jake Krimmel says some of this market shift in these cities may be due to continual readjustment following the COVID-19 pandemic.
"It looks like August was the month where higher mortgage rates really caught up to housing demand," Krimmel said.
During the same period in 2025, mortgage rates were declining, so in the coming months, the year-over-year comparison will begin to look worse.
"It’s a time of year when activity typically winds down rather than ramps up," Krimmel said. "Plus, the U.S. just suffered through two of the hottest months on record—hardly ideal house-hunting weather."
Still, he acknowledges that six months of rising mortgage rates have not helped.
"Regardless of whether it’s due to dog days of summer seasonality or real signal, housing activity is slowing for now," he said.
Jordan Green covers trending news for The Commercial Appeal and Tennessee. She can be reached at jordan.green@commercialappeal.com.
This article originally appeared on Memphis Commercial Appeal: Memphis home prices drop 4.1%, among the largest declines in the US
