This is why Chattanooga home prices are rising faster than all other Mid-South markets

Jason Grap, left, and Jason Heard of Hedgecoth Construction build a wall in front of one of two new Habitat houses being built on Snow Street in North Chattanooga on Jan. 7, 2015,

Home prices in Chattanooga grew nearly twice as fast as the nationwide average in the past year, buoyed by both an improving local economy and a shrinking inventory of homes that encouraged buyers to bid up prices.

The National Association of Realtors said Wednesday the median price of homes sold by Realtors in the Chattanooga area rose over the past year by 11.3 percent - or $16,000 for the typical home - to a median sales price of $157,200. The price gains in Chattanooga outpaced all other Mid-South cities.

Nathan Walldorf, a broker for Herman Walldorf Real Estate who is the 2015 president of the Greater Chattanooga Association of Realtors, said the higher median price reflects both the price appreciation of existing homes and the buying preference for higher-priced homes compared with a year ago.