Nashville’s Unified Housing Strategy:
Addressing Housing Accessibility in America’s Most Gentrified City
August 2025
Photo: Tony Gonzalez
Jason Richardson, Senior Director, Research
Joseph Dean, Racial Economic Junior Research Specialist
Greg Wilson, Senior Organizer
Key Takeaways
1
Nashville is the most intensely gentrifying city in the nation as average homebuying costs have doubled since 2018, revealing the systematic exclusion of lower-income families from homeownership.
2
Closing cost disparities have worsened dramatically, with Black borrowers paying $3,364 more than White borrowers in 2024, directly undermining Nashville’s Unified Housing Strategy (UHS) equity goals.
3
Local banks outperformed national institutions in community lending, led by Pinnacle Bank’s exceptional 54.4% low-moderate income lending rate. Wider-reaching institutions should do more to provide equitable service to the Nashville area housing market.
4
Fifth Third Bank’s $20 million North Nashville investment goal demonstrates their commitment to the community, but the 21.2% of their mortgage lending that goes to low- and moderate-income borrowers (LMIB) slightly lags behind the market average of 23.5% LMIB lending, showing the need to pair development investments with improved daily lending equity efforts.
5
Regional displacement affects all 14 counties in the Nashville area, with Davidson County experiencing a 19.9% lending decline despite having a 20.9% population growth rate between 2010-2020.
6
Rural counties became repositories for displaced families, with 70.1% of loans in rural Tennessee being made in Low- and Moderate-Income Census Tracts (LMICT).
7
Income screening has replaced income growth, with families effectively excluded from mortgage lending if they make less than $134,000 a year, requiring immediate UHS intervention.
8
The region’s rental crisis compounds existing homeownership barriers, with 128,488 renters spending more than 30% of their incomes in rent, creating an urgent need for coordinated mortgage lending reform if these cost-burdened renter households are ever to become homeowners.
Executive Summary
This report provides critical context for implementing Nashville’s newly released Unified Housing Strategy (UHS). Nashville ranked as the most gentrified city in the United States during the 2010s, as NCRC revealed in our recent report “Displaced by Design,” making the UHS and equitable mortgage lending programs and initiatives essential for the community’s survival and realizing economic justice in the city writ large. This follow-up analysis examines mortgage lending patterns in the Nashville-Davidson-Murfreesboro-Franklin, TN Core-Based Statistical Area (the Nashville CBSA) from 2018 through 2024 to zero in on what local patterns may underlie Nashville’s unenviable ranking atop the gentrification list and how local actors might tailor the new initiative to mitigate that pattern.
The UHS builds on the foundation established by former Mayor John Cooper’s 2021 Affordable Housing Task Force Report, which documented Nashville’s severe housing crisis. It found that 44% of renters were cost-burdened and projected the city would require 52,498 new affordable units by 2030. While the 2021 report focused primarily on rental affordability and subsidized housing production, this mortgage lending analysis addresses a critical gap in the conversation by examining how banking practices and homeownership barriers have further compounded the rental crisis identified in that foundational work.
The Nashville metro area experienced a substantial population surge of over 20% between the 2010-2020 period while also facing a severe housing affordability crisis. The region is growing more diverse, with the metro’s Hispanic population increasing by 78% over the past decade.
Mayor Freddie O’Connell released Nashville’s first Unified Housing Strategy in April 2025. It calls on “all Nashvillians – residents, employers, developers, financial institutions, philanthropists, Faith communities and community leaders – to join together and play an active role in implementing housing solutions for our city.”
The UHS emphasizes coalition-building to address Nashville’s housing crisis, as the city’s press release announcing the UHS made clear.
“The Community Foundation of Middle Tennessee [CFMT] is excited to lean in with our Metro partners to create a true community coalition united by a shared determination to make an impact on this issue that is foundational to our well-being as a community,” said CFMT’s CEO Hal Cato, in the release.
The diverse coalition of stakeholders envisioned in the UHS will include financial institutions themselves. This analysis will hopefully benefit the whole coalition by Illustrating how banks and lenders are currently serving Nashville’s diverse communities.
The local mortgage market experienced dramatic changes from 2018 to 2024, with steady growth through 2021 giving way to a significant market contraction during the 2022-2023 period, which has shifted into a modest recovery in 2024 data.
Understanding these patterns is crucial for UHS’ success. Mortgage lending practices will determine whether the strategy achieves its goal of housing security for all Nashvillians or whether financial barriers will continue to exclude working families from homeownership.
Regional Context and Demographics
Population Growth and Housing Pressure
The Nashville metropolitan area experienced unprecedented population growth over the past decade, with more than one in five new residents moving to the region between 2010 and 2020. This growth surge wasn’t limited to Davidson County as surrounding counties like Williamson, Rutherford and Wilson saw even more dramatic population increases, with some counties’ populations increasing by one-third. The widespread nature of this growth distributed housing pressure across the entire 14-county metropolitan region, validating the UHS’ regional approach.
The region also became significantly more diverse during this transformative decade. The Hispanic population nearly doubled in size, while Asian populations grew by two-thirds. These demographic changes occurred at the same time as the housing affordability crisis began to intensify, creating compounding challenges for communities of color seeking homeownership opportunities in the region.
The UHS anticipates continued growth of approximately 175,000 new residents by 2034, requiring about 90,000 additional housing units in Davidson County alone. Roughly half of these new units will need to serve aspiring homeowners, making mortgage lending accessibility critical to accommodating the region’s future population growth.
Income Distribution and Geographic Inequality
Household income distribution across the region reveals stark geographic disparities that mortgage lending patterns both reflect and reinforce. Family incomes vary greatly across Metro Nashville’s counties, with median earnings ranging from $56,269 to $131,202. Williamson County leads the region with 43.4% of households earning $150,000 or more, while in neighboring Davidson County only 19.9% of households are at this income level. Rural counties have significantly lower median household incomes, with 9.1% of Cannon County residents earning above $150,000.
In the maps below, we show how home purchase lending is distributed across the core counties of Metro Nashville compared with the average census tract incomes and the percent of minority residents:
This pattern confirms the pressures of gentrification on buyers as they seek homes in LMI and majority-minority census tracts despite many lenders reporting low levels of lending to LMI or non-White people.
These geographic income inequalities created a foundation for the displacement pressures documented in the mortgage lending data. Families unable to afford homeownership in majority high-income counties face pressure to move to more affordable rural areas or become part of the 34.6% of households that rent their homes, often becoming cost-burdened in the process.
Rental Market Crisis
Understanding the region’s rental housing crisis provides the necessary context for understanding the persisting mortgage lending barriers communities face. With 275,233 households renting their homes, the rental market spans from studio apartments representing 30.4% of rental units to larger family accommodations. However, 128,488 renters are cost-burdened, with 24.9% earning less than $20,000 annually, demonstrating how rental costs prevent families from saving for mortgage down payments.
The geographic distribution of rental units mirrors mortgage lending access patterns across the region. Davidson County has 142,532 rental units with 37.2% being studio or one-bedroom apartments, reflecting both its urban density and the reality that families are squeezing into smaller spaces due to affordability constraints. In contrast, rural counties often have higher levels of larger rental units, like Smith County with 49.2% of rentals consisting of three or more bedrooms.
Mortgage Lending Trends and Barriers
Market Volatility and Access Patterns
The Metro Nashville mortgage market underwent significant volatility during the analysis period, peaking at 31,875 loans in 2021 before contracting to 21,756 loans in 2023. This dramatic market contraction occurred during the region’s population boom, creating a mismatch between housing demand and credit access that exacerbated the affordability crisis the UHS aims to address. Data on home purchase loans specifically shows the impact of surging prices from 2018 to 2024, as loan amounts and incomes have skyrocketed.
The 59% increase in average loan amounts since 2018 reflects both rising property values and the exclusion of lower-income families from the market. Most concerning, closing costs more than doubled (from $4,796 to $11,141), creating substantial upfront barriers that prevent families from accessing homeownership even when they can afford the monthly payments.
Demographic Access and Exclusion
Mortgage lending access patterns reveal how different communities navigated the region’s volatile market conditions. While non-Hispanic White and Black borrowers both reported receiving fewer loans, Hispanic and Asian home purchases have both increased dramatically. The chart below tracks the shifting home purchase lending by race:
Table 2. Total population changes by race/ethnicity nationally in gentrifying and non-gentrifying neighborhoods. (Source: Calculation of central city census tracts via Brown University’s Longitudinal Tract Database (LTDB) population data)
This pattern mirrors the national trends as well. In 2024, Hispanic adults accounted for about 16.8% of all Americans and 17.7% of homebuyers. Meanwhile, 7% of the adult population are Asian and they received 9.4% of home purchase loans in 2024.
The 73.7% increase in Hispanic borrowers demonstrates that progress is being made in expanding housing access to this particular community. This corresponds with the Hispanic community’s 78.2% regional population growth. However, this progress is being undermined by persistent income gaps and closing cost disparities that create systematic financial barriers for communities of color.
Closing Cost Disparities Undermining UHS Goals
Worsening Cost Barriers
The most alarming trend in the data is the rise in closing cost disparities between demographic groups. Closing costs are often the biggest barrier that a first time homebuyer must overcome. Their enormous increases signal greater pressure than ever on families that want to become homeowners:
The $3,364 gap in closing costs for Black and White borrowers represents a 146% increase from the 2018 gap of $1,365. For a Black family earning $134,121, this additional cost represents 2.5% of their annual income – money that could otherwise support down payment savings or emergency reserves.
These disparities directly undermine the UHS’ goal to “increase access to housing for all protected classes by addressing long-standing housing inequities. When combined with the rental market crisis, where 24.9% of cost-burdened renters earn less than $20,000 annually, these upfront barriers effectively lock families out of homeownership pathways.
Geographic Displacement Patterns
County-Level Analysis
County-level mortgage lending patterns confirm the UHS’ focus on regional coordination by revealing displacement pressures affecting all 14 counties. Population increases in the Nashville area have not translated into more equitable owner-occupied home purchase lending outcomes, as illustrated in the chart below.
The contrast between population growth and the ongoing lending decline in Davidson County demonstrates continuing displacement pressures. The even more striking figures for Williamson County, where the decline in lending and rise in population each exceeded 35%, suggesting that cash purchases are increasing and moderate-income families are being excluded from borrowing. More than 70% of mortgage loans in rural counties were made in low- and moderate-income census tracts, indicating these communities are effectively serving as destinations for families priced out of urban and suburban markets.
These patterns coincide with the UHS’ regional approach and also highlight the urgency of implementing distinct, place-tailored action mechanisms in coordinated fashion through the coalitions the UHS will convene. Without intervention, current trends will continue pushing working families into rural counties with limited employment opportunities and less transportation access, while urban cores become increasingly exclusive.
Financial Institution Performance
Local versus National Bank Performance
The analysis of bank performance reveals significant variations in community lending across banking institutions, with local institutions consistently outperforming national banks. While Pinnacle Bank demonstrated a high level of home lending to low- to moderate-income borrowers, several other major area lenders fell short. This chart of the ten banks that made the most home purchase loans in the Metro Nashville area in 2024 reveals different patterns of lending with some lenders excelling at making home purchase loans to specific borrowers or communities far more than other banks.
Pinnacle Bank’s 54.4% low- to moderate-income lending rate demonstrates that equitable lending is achievable at scale, providing a benchmark for UHS’ future partnerships with financial institutions. Nashville-based Pinnacle Bank recently announced their intention to merge with Synovus bank. The merger with Synovus is an opportunity for Nashville to engage with Pinnacle Bank towards ensuring this equitable pattern of lending continues.
Community Investment Opportunities
Fifth Third Bank’s June 2025 announcement of a $20 million investment in North Nashville represents the type of financial institution leadership the UHS hopes to see become more widespread throughout the area.
The local relationships that philanthropic commitment fosters should also help Fifth Third to strengthen their mortgage lending to disadvantaged borrowers, which slightly lags behind the local market average of 23.5%. The bank’s 21.2% LMIB mortgage lending share in Nashville showcases an opportunity to further align their community development investments with their role in expanding homeownership opportunities.
Nashville stakeholders could create a model for enhanced accountability where banks making high-profile community investments regularly demonstrate improvement in CRA lending metrics within 12-18 months, ensuring comprehensive community investment outcomes.
Policy Recommendations for UHS Implementation
Financial Institution Partnership Framework
To more effectively achieve UHS’ goals, certain accountability mechanisms should be established that are unique to the local context:
- Performance Standards: Banks participating in the UHS program implementation process must meet specific lending targets for low- to moderate-income borrowers and communities of color, with Pinnacle Bank’s 54.4% LMIB performance being utilized as a benchmark.
- Closing Cost Equity Requirements: Eliminate the maximum number of allowable disparities in closing costs across demographic groups along with penalties for systematic discrimination that prevents families from accessing homeownership.
- Community Investment Integration: Banks should make community development investments that demonstrate corresponding improvements in daily lending equity, with the Fifth Third Bank model being used as a possible benchmark in addition to enhanced performance requirements.
Regional Coordination Mechanisms
The following recommendations could better assist key regional stakeholders, such as the Greater Nashville Regional Council, to leverage county-level data towards more effective UHS regional coordination:
- Multi-County Housing Trust Fund: Pool resources across all 14 counties to address displacement pressures affecting the entire region by way of funding provided through Community Reinvestment Act obligations and community benefits agreements.
- Growth Management Coordination: Balance development across counties to reduce concentration pressures that force 128,488 renters to become cost-burdened when seeking homeownership alternatives to urban and suburban corridors.
- Invest in Transportation and Infrastructure: Ensure families displaced to rural counties maintain access to urban employment opportunities recognizing that 70.1% of rural lending serves low- to moderate-income census tracts.
Measuring UHS Success
Establishing Accountability Through Data-Driven Measurement
Nashville’s Unified Housing Strategy will only succeed if measurable progress occurs in making housing more accessible for all residents. The UHS requires a measurement framework that captures both access barriers and systemic lending patterns that undermine equitable housing outcomes.
The housing crisis in Nashville stems from interconnected factors: rising costs, discriminatory lending practices and geographic displacement patterns that concentrate affordable housing in areas with limited economic opportunity. To address these problems effectively, tracking the right indicators and holding all stakeholders accountable for real change is essential.
Key Housing Barriers to Track
The suggested success measurements below focus on the barriers that prevent families from accessing homeownership and the lending patterns that either help or harm different communities. These indicators will determine whether Nashville becomes more inclusive or whether existing problems persist under new policy frameworks.
Financial Obstacles Preventing Equal Access:
- Black families pay $3,364 more in closing costs than White families, with this additional cost creating substantial barriers to homeownership even when families can afford monthly payments.
- Families earning less than $119,029 are largely excluded from homeownership. This income threshold demonstrates how expensive Nashville’s housing market has become.
- Rural counties account for 70.1% of lending to lower-income areas while wealthy suburbs only account for 2.1%. Families priced out of expensive areas face displacement to locations further away from employment centers.
Lending Volume and Demographic Participation:
- Only 26,725 families received home loans in 2024 (only 1.3% of all households in the region), demonstrating the limited scale of homeownership opportunities relative to the regional population.
- Hispanic families received 10.5% of loans, Black families received 8.2% and Asian families received 5.8%. These percentages are an accurate indicator for whether lending patterns reflect the region’s demographic diversity.
- Only 23.5% of all loans served low- to moderate-income families, showing that most lending serves higher-income households.
Five-Year UHS Success Targets
The following success targets represent achievable improvements that families will experience directly. Each goal includes specific deadlines and accountability mechanisms to ensure the UHS delivers concrete benefits rather than purely aspirational statements:
- Reduce closing cost gaps by 50% to eliminate systematic financial barriers for historically underrepresented communities.
- Increase low- to moderate-income lending to 30% for all financial institutions.
- Achieve proportional demographic representation in lending reflecting regional population trends.
- Reduce cost-burdened renters from 128,488 to under 100,000 through improved homeownership access efforts.
Conclusion
This Nashville CBSA mortgage lending analysis confirms the need for UHS’ regional approach while highlighting the specific barriers that must be addressed to fully realize the strategy’s ultimate success. The combination of explosive population growth (20.9% during the 2010-2020 period), demographic diversification and persistent lending disparities creates both urgent challenges and clear opportunities for intervention.
Fifth Third Bank’s $20 million North Nashville investment demonstrates promising community commitments from financial institutions, but it should be paired with improved day-to-day lending equity to create a comprehensive model for financial institution partnerships with communities. The strong performance of institutions like Pinnacle Bank shows that equitable lending is achievable at scale and provides useful benchmarks for UHS’ program implementation process.
The regional displacement patterns confirm that the Metropolitan Nashville area’s housing crisis affects all 14 counties, requiring coordinated action across all stakeholder groups. Only comprehensive action that addresses both development investment and systematic lending barriers will accomplish the goals detailed in the UHS. NCRC’s recent report on national gentrification trends (“Displaced by Design”) notes cities where displacement has been kept in check.
For the UHS to succeed in creating a city where “all Nashvillians have access to a safe, stable and affordable place to call home,” addressing mortgage lending barriers must be an immediate priority. The strategy’s affordable housing goals cannot be achieved while financial institutions continue excluding families through discriminatory practices and excessive closing costs that have more than doubled since 2018.
The path forward requires implementing the UHS with strong financial institution accountability measures, addressing the systematic lending barriers revealed in this analysis and accurately measuring progress through demographic and geographic equity indicators.
Methods and Data Sources
This analysis utilized Nashville CBSA’s HMDA data for the 2018-2024 period combined with demographic data from PolicyMap’s community profile reports and the US Census Bureau’s reporting sources. The analysis was designed to support the implementation of Nashville’s Unified Housing Strategy released in April 2025.
Another primary source used in this report was Home Mortgage Disclosure Act (HMDA) Loan Application Register data covering home purchase loan originations for site-built, 1-4 unit, owner-occupied homes for all financial institutions operating in the Nashville CBSA. Individual lender performance data reflects 2024 originations only, while county-level lending patterns and loan cost analyses span the full 2018-2024 period. Additional sources include the City of Nashville’s Unified Housing Strategy supporting documents and the US Census Bureau’s demographic and rental housing data for Nashville’s 14-county region.
The analysis methodology aligns with UHS’ implementation needs by establishing baseline metrics for measuring progress and evaluating bank performance against UHS’ goals for financial institution partnerships.
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