Tri-Cities New Home Market Holds Steady in Sales but Jumps in Price
The Tri-Cities new home market did not expand in size in May, but it became noticeably more expensive. While the number of closed sales remained unchanged from a year ago, both median and average prices posted substantial gains. That combination points to a market where demand is still holding, but the cost of entering the new construction segment continues to rise. For buyers, builders, and sellers watching Northeast Tennessee housing trends, May’s data offers a clear reminder that price growth can remain strong even when transaction volume stays flat.
Prices Are Climbing Even Without More Sales
There were 86 new home sales across the Tri-Cities in May, exactly the same number as in May 2025. But the pricing story was much different. The median sold price rose 20.6% to $387,932, while the average sold price increased 17.9% to $423,326. Those are significant year-over-year gains, especially in a market where sales volume did not move.
Compared with the broader all-sales market, new construction is clearly seeing stronger price appreciation. The median price for all home sales in the region was $300,000, up 4.8% from last year, while total sales improved by just 1.3%. That contrast highlights how much more rapidly the new home segment is moving up in value.
Builders also did not appear to need major price cuts to close deals. New homes sold for 99.4% of their list price, nearly identical to last year. That suggests buyers are still willing to pay close to asking price, reinforcing the idea that demand for new construction remains healthy even at higher price points.
Larger Homes and Higher Price Tiers Are Driving the Shift
Part of the price increase came from buyers purchasing larger homes. The median new home sold in May measured 1,864 square feet, up 115 square feet from a year ago. At the same time, price per square foot also increased, with the median price per finished square foot rising 11.4% to $204.96. In other words, buyers were not just paying more because homes were bigger. They were also paying more for each square foot of finished space.
The biggest pricing change may be happening at the lower end of the market. In May 2025, one in five new homes sold for less than $250,000. This year, only 6% of sales fell into that range. Meanwhile, homes priced at $500,000 and above grew from 13% of sales to 20%. That shift suggests entry-level new construction is becoming less common, while higher-priced homes are making up a larger share of the market.
Johnson City Continues to Lead Regional New Construction Activity
Johnson City once again led the region in new home sales with 29 closings, accounting for more than one-third of the total. Greeneville and Jonesborough followed with 11 sales each, while Bluff City and Kingsport rounded out the busiest local markets.
Recent building permit trends suggest that future supply could vary by metro. During the first four months of 2026, the Johnson City metro recorded 284 single-family permits, down from 310 a year earlier. Meanwhile, Kingsport-Bristol posted 278 permits, up from 221 last year. That could mean more future building momentum in Kingsport-Bristol, even as Johnson City remains the region’s current new home leader.
Overall, May’s data shows a Tri-Cities new home market that remains active but increasingly expensive. Sales volume may be steady, but higher prices, larger homes, and fewer lower-cost options are reshaping what new construction looks like across Northeast Tennessee.
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