June Christian is moving from her Hixson apartment to her newly purchased townhouse, and she'll be making the same monthly payment she does renting.
Christian likes her apartment, but she wishes she had a yard and little garden.
"It's nice just knowing that you're putting money into something you own instead of that money just going out," she said.
With house prices down and mortgage rates lower than they've been in 60 years, Christian is among a growing number of local homebuyers who helped push home sales last month to the highest number since June 2010.
In August, 595 residential units sold, a 13.5 percent increase over July and 24 percent jump over August 2010. Compare that to a national August-to-August increase of 18.6 percent, and Chattanooga is looking good.
"We're down considerably from where we were in '06 and '05, but compared to the rest of the country we're doing well," said Jay Bell, owner of Bell Development. "It's going to be slow, steady growth from here on out."
Part of that growth comes from low home prices. The median home selling price in Chattanooga last month was $129,000, about $4,000 lower than the August before and $13,000 less than this July.
And 15-year mortgage rates below 4 percent were a huge motivator for new homebuyers.
"There's no doubt low interest rates are driving it, and beyond that people have postponed their moves for so long there's a lot of pent-up demand," Bell said.
That pent-up demand seems to have burst out as buyers lock in low-rate loans on low-price homes.
"It's not surprising," said Tina Christein, branch manager of local Churchill Mortgage. "People are starting to realize with the rates this low, they can get a home for less than they're paying in rent right now."
Those rates are what kicked Christian into her search, and could motivate the housing market to steady increases.
"You've got some really positive underlying things, and then you've got some strong headwinds, too," said Walter Molony, spokesman for the National Association of Realtors.
In addition to interest rates and lower prices, Molony cited rising incomes and rent rates as catalysts for home sales.
But tight credit is holding many potential homebuyers and sellers back from buying. Lenders still feeling burned by the housing crash years ago are requiring a high credit standard before approving any mortgages.
"Lenders are using arbitrarily high credit scores. We think the pendulum has swung from being too loose to too restrictive," Molony said. "It's kind of a pattern of two steps forward, one step back."
But as long as the economy continues to improve, Molony expects the housing market will follow.
That could be good news for metropolitan Chattanooga, which added 6,800 jobs over the past two years, according to the U.S. Bureau of Labor Statistics.
"That kind of sounds like the housing market," Molony said. "It's gradually trending up."
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