Submitted by Tennessee Housing Development Agency (THDA)

In recent years, Memphis and some surrounding counties have witnessed difficult times because of the housing crisis. Memphis topped the state in terms of the number and rate of foreclosures for many years. According to Market Trend data from CoreLogic, in December 2010, approximately 15 percent of all completed foreclosures in the state were located in Shelby County. Even though negative equity (borrowers owing more on their mortgage than their homes are worth) in Tennessee was not as severe as other states, Memphis area was disproportionally impacted by housing values falling below the mortgage amounts. In December 2010, for example, according to data from CoreLogic, the share of loans with negative equity among all properties with a mortgage in Shelby County was approximately 15 percentage points higher than the state average. Shelby, Maury, Fayette, Lauderdale, Tipton, Counties had the highest negative equity shares in the state in December 2010. Almost 35 percent of borrowers with negative equity in the state were residing in Shelby County.

High foreclosure activity meant that many homes in deeply impacted neighborhoods lost value because of neighborhood declines in home value. As such, the make-up of Memphis’ housing market has shifted to a larger renter population where 41 percent of households rent in 2013 versus just 38 percent in 2009. Homeownership rates varied across urban and rural counties in the area. For example, while 81 percent of Fayette County and 74 percent of Tipton County households own their own home, only 59 percent of Shelby County households are owner-occupied. By way of comparison, the state of Tennessee has a homeownership rate of 68 percent. Recent homeownership rates in the state and in the Memphis MSA counties were lower than the homeownership rates in 2010. For example, in 2010, owner occupied housing was 62 percent of total housing in the county, and 70 percent of all housing in the state was owner occupied.

Finding an affordable home to rent or to buy is a fundamental need for all who call the Memphis area home. At the median household income of $46,250 in Shelby County, residents in the county were able to afford to buy a median priced home and rent a median priced apartment. The post-recession spikes of foreclosure and declining home values (both of which have since stabilized) ultimately boosted housing supply and helped keep affordable opportunities in Shelby County. In 2010, 37 percent of owner-occupied households with a mortgage in Shelby County were cost burdened (paying more than 30 percent of their income). In 2013, the cost burdened owner occupied households with a mortgage declined to 35 percent. Renter households in the state or in Shelby County became even more cost burdened during the same time period.

Shelby County is still experiencing large vacancy rates, in spite of the tens of thousands of households that are cost burdened. In the state and in the Memphis MSA counties, the vacancy rates among the renter and owner occupied households declined in 2013 compared to 2010. While the vacancy rates were lower in 2013 compared to 2010, they were still quite higher in Shelby County compared to the state. In 2010, 15 percent of rental housing stock in Shelby County and 10 percent of rental housing in the state were vacant. In 2013, rental vacancy rate declined to nine percent in the state and to 13 percent in Shelby County.

Additional Resources

Tennessee Housing Development Agency

Memphis Housing Authority

City of Memphis - Division of Housing and Community Development