Nashville Real Estate Market: Oil Prices, the Fed, and Why Buyers Are Coming Back

If you've turned on the news lately, you've probably seen headlines about renewed fighting in the Middle East and little to no stability in oil prices. It's easy to assume that kind of instability is bad news across the board, but the story for the Nashville housing market right now is more nuanced than the headlines suggest.

Why Oil Prices Are Moving Mortgage Rates

Back in spring of 2026, the conflict between the U.S. and Iran escalated to the point that the Strait of Hormuz, the passage that a huge share of the world's oil and natural gas moves through, was effectively shut down.

Oil spiked to well over $110 a barrel, and for a minute it looked like we were heading into a serious inflation problem furthering the sensitivity to interest rates and housing market as a whole. A ceasefire in June brought oil prices back down into the low $70s, but the calm didn't last. Fighting flared up again this month, oil has been climbing since, and the International Energy Agency is warning there's no room for complacency.

Oil markets may never be on your mind, but here’s why this matters: rising energy costs feed inflation, one major factor standing between us and lower mortgage rates. Consumer prices were up 4.2% year over year, more than half of that increase traced directly back to energy.

The FOMC met July 29 and elected to keep the funds rate unchanged. Mortgage rates spiked last week due to the uncertainty so I anticipate we see them settle back down in the coming weeks due to the FED holding steady.

What Doesn't Make the Headlines: Buyers Are Coming Back

Nationally, pending home sales in June were down just 0.3% from a year ago. On its own that doesn't sound like much, but think about what it's being measured against. Last year was the slowest year for home sales volume we've seen in three decades. A market that's basically flat against a bottom that low isn't a market that's still falling, it's a market that's found its footing.

*Nashville specifically shows strong and steady growth. Year over year as of June, new listing inventory, total inventory, average days on market, and monthly supply are all down. While pending sales, average and median sales price, are all up. This is a key indicator that homes are not lasting as long on the market and are selling for more year over year. (See TABLE below)

Buyers who spent the couple years waiting for rates to drop back toward 5% are starting to accept that something closer to 6.5-7% might just be where we live for a while, and instead of continuing to wait, they're adjusting their budgets and getting back into the market. At the same time, sellers have come to terms that they still need to move and will need to adjust their expectations for sales price and terms to achieve the

ir next chapter of life as well. 

That's a healthier place for our local Nashville real estate to be, than another year of buyers frozen on the sidelines and a less sticky market as a whole.

What This Means for Nashville Real Estate Market: Buyers and Sellers

If you're a seller, this is genuinely good news. It means real demand is coming back into the market even with rates elevated, which tells me the moment rates ease even a little, we could see a real wave of activity behind it. If you're a buyer who's been waiting for "the right time," it's worth asking yourself honestly whether that time is ever going to look perfect, or whether it makes more sense to get in now while some sellers are still negotiable and before the rest of the market catches on that things are turning.

We'll keep watching the FED, the Middle East, and oil prices closely because all of it flows through to what's happening in our market. But the headline volatility and the on-the-ground reality are two different things right now, and the on-the-ground reality is that Nashville buyers are coming back.

Ian H. Ratliff

Broker/Owner of RATLIFF Real Estate