Memphis home prices dropped 4.1% in August 2026 compared to a year earlier, making the Tennessee city one of only three major U.S. metropolitan areas to post a decline of more than 4%, according to data released September 2 by Realtor.com. The median listing price per square foot in Memphis fell from year-ago levels, placing the metro third-worst nationally behind Austin, Texas (down 8.1%) and Tampa, Florida (down 5.6%).
The decline marks the tenth consecutive month of year-over-year price drops nationwide and reflects a broader cooling trend hitting former pandemic boomtowns hardest. While the national median listing price per square foot fell just 1.8% in August, Memphis buyers are seeing steeper discounts as inventory climbs and sellers adjust expectations in a market that has shifted decisively away from the frenzied conditions of 2021 and 2022.
For Memphis homebuyers, the price correction offers the most favorable conditions in years. For sellers, it signals the need to price competitively or risk sitting on the market as the city absorbs a wave of new listings that has outpaced buyer demand throughout 2026.
The numbers
How Memphis compares to the nation
The city’s 4.1% drop in median listing price per square foot was more than double the national decline.
Memphis posted a 4.1% annual decline in median list price per square foot in August 2026, according to Realtor.com’s August 2026 Monthly Housing Trends Report. Median list price per square foot fell in 36 of the 50 largest metros nationwide, but Memphis ranked among the hardest hit.
Nationally, the median list price fell 1.2% from a year earlier, while list price per square foot declined 1.8%. On a price-per-square-foot basis, the Midwest rose 1.8%, while the Northeast declined 0.7%, the South fell 2.8%, and the West dropped 1.0%. Memphis, situated in the South, fell faster than its regional peers.
The price-per-square-foot metric adjusts for changes in the size mix of homes for sale, offering a clearer picture of true price movement than median sale price alone. In Memphis, both measures have trended downward. Earlier in 2026, the median listing price in Memphis stood at $178,500 in January, reflecting a 10.9% decrease from the same period last year, while the median list price dropped 20% to $170,000 in April according to separate Realtor.com data analyzed by market observers.
Top declines in August 2026
Austin, Texas, led the nation with an 8.1% decline in median list price per square foot, followed by Tampa, Florida, at 5.6% and Memphis, Tennessee, at 4.1%. San Antonio, Denver, Baltimore, San Diego, Orlando, and Portland, Oregon, also posted significant year-over-year decreases. Meanwhile, Providence, Rhode Island, recorded the largest gain at 9.3%, followed by Indianapolis at 4.4% and Chicago at 3.6%.
Context
Why Memphis prices are falling
Inventory surges, pandemic price runups, and rising carrying costs have converged to pressure Memphis sellers.
Memphis is not alone in seeing prices retreat. Realtor.com senior economist Jake Krimmel linked many of the declines to cities that surged earlier in the decade. During the pandemic, Memphis—like Austin, Tampa, and other Sun Belt metros—saw rapid appreciation as remote workers and investors piled into relatively affordable markets. Now, as mortgage rates remain elevated and the initial wave of buyers has been absorbed, the market is correcting.
Inventory has climbed sharply in Memphis throughout 2026. Memphis experienced a surge in inventory in early 2026, with active listings soaring by 25.2% compared to the previous year, far outpacing the national average increase of 10.0%. By April, active listings hit 2,454, up 31.6% from a year ago, dwarfing the national inventory gain of just 4.6% over the same period. More homes are hitting the market than buyers are absorbing, and that imbalance is driving price declines.
Rents have also fallen. Memphis saw a 10.1% drop in median one-bedroom rent to $890 in August 2026, with Zumper tying the declines to a multiyear wave of apartment construction across the Sun Belt. The rental market’s softness reflects the same oversupply dynamics affecting for-sale homes.
Different data sources paint slightly different pictures of Memphis home values—Zillow, Redfin, and Realtor.com use different methodologies—but all point in the same direction. Zillow reported the average Memphis home value at $146,746 as of June 30, 2026, down 3.0% over the past year. Redfin data showed the median sale price per square foot in Memphis at $117 for the three months ending May 2026, down 7.8% since last year, even as the overall median sale price rose due to a shift in the mix of homes sold.
What it means
Opportunities for Memphis buyers, caution for sellers
This is the most buyer-friendly Memphis market in years, but sellers need to price realistically.
If you’re buying in Memphis right now, you have leverage. More than 20% of active listings nationwide had undergone a price reduction during August, meaning buyers in many markets can negotiate. In Memphis specifically, the surge in inventory and falling prices mean you can take your time, compare options, and make offers below asking price with a realistic chance of acceptance.
Mortgage rates remain a headwind. According to Freddie Mac’s survey, the average 30-year fixed mortgage rate stood at 6.71% as of September 3, 2026. For buyers financing most of a home purchase, interest rates at that level can offset much of the benefit provided by modestly lower prices. Still, a 4.1% price drop on a $200,000 home saves $8,200—enough to cover closing costs or buy down your rate.
If you’re selling, price aggressively from day one. Homes that sit on the market get stale, and buyers in Memphis have plenty of choices. More homes are hitting the market than buyers are absorbing, and that imbalance is driving everything else in the data. Consider pre-listing inspections, minor repairs, and professional staging to stand out. If you need to sell quickly, a direct cash offer may be worth exploring, even at a discount.
For a comprehensive look at buying a home in Tennessee, visit our Tennessee home buying guide. If you’re working with a tight budget, explore down payment assistance programs and zero-down mortgage options. Understanding how much house you can afford is critical in a shifting market.
National inventory snapshot
Active listings rose 3.6% year over year to 1,140,000 in August 2026, the fastest annual growth rate so far this year. Inventory remained 7.7% below August 2019 levels, but the extraordinary housing shortage that characterized the pandemic years has eased substantially. More supply means more choice—and more negotiating power for buyers.
Quick answers
Memphis home prices: common questions
Are Memphis home prices still falling in late 2026?
Yes. As of the most recent data released in early September 2026, Memphis median listing prices per square foot were down 4.1% year-over-year in August. The trend has persisted for most of 2026, with inventory climbing and sellers adjusting expectations. Future price movements will depend on mortgage rates, local employment, and whether inventory growth continues to outpace buyer demand.
How does Memphis compare to other Tennessee cities?
Memphis has underperformed Nashville and Knoxville in recent price trends. While Memphis prices fell 4.1% in August 2026, other Tennessee metros have seen more modest declines or even slight gains. Earlier forecasts suggested Memphis would see slower appreciation than Knoxville or Nashville through 2026, and that has largely played out.
Is now a good time to buy a house in Memphis?
For buyers, yes—this is the most favorable Memphis market in years. Inventory is up sharply, prices are falling, and sellers are more willing to negotiate. Mortgage rates around 6.7% are still elevated by historical standards, but the combination of lower prices and increased selection gives buyers real leverage. Run the numbers carefully and don’t overbid in a cooling market.
Should I wait to sell my Memphis home until prices recover?
That depends on your timeline and financial situation. If you can afford to wait and believe Memphis prices will rebound in 2027 or beyond, holding may make sense. But if you need to sell soon, waiting could mean watching your home’s value decline further as inventory continues to rise. Price competitively now, or risk chasing the market down.
What caused Memphis home prices to drop so much?
Memphis prices surged during the pandemic as buyers sought affordability and remote work enabled relocations. Now, inventory has flooded the market—up more than 25% year-over-year in early 2026—while mortgage rates near 7% have kept many buyers on the sidelines. The result: more supply than demand, forcing sellers to cut prices. Falling rents (down 10.1% in August) reflect the same oversupply in the broader housing market.
Are Memphis home prices expected to keep falling in 2027?
Most forecasts from late 2025 and early 2026 predicted modest, slow growth for Memphis in 2026 and 2027, but actual 2026 data has shown steeper declines than anticipated. Future trends will depend on mortgage rates, local job growth, and whether new construction and listings continue to outpace buyer demand. No major forecast calls for a crash, but further modest declines or flat prices are possible if current conditions persist.