New home sales in the Tri-Cities region fell 6.1% in the first quarter of 2026 compared to the same period a year ago. Prices continued their climb, and the typical new home got noticeably larger, according to the Northeast Tennessee Association of Realtors (NETAR).
Buyers closed on 169 new homes across the nine-county region in Q1 2026, down from 180 in Q1 2025. Despite the volume decline, the median sale price rose to $388,000. That’s a 9.3% increase from $355,000 a year earlier. The average sale price increased 4.7%, from $374,645 to $392,313.
The spread between the average and median price growth is a market signal worth noting. When the median outpaces the average, it typically reflects upward price pressure in the middle of the market rather than at the high end. In a market where middle-market buyers are most active, that dynamic points to tightening supply at the price points where demand is strongest.
New homes also got bigger. Average finished square footage rose 7.3%, from 1,862 to 1,998 square feet. At the same time, the average price per square foot slipped slightly. It slipped from $204.98 to $202.02, a 1.4% decline.
Typical sale moving faster
Homes took slightly longer to sell in Q1 2026. Average days on market rose 1.3%, from 129.8 days to 131.4 days. The median, however, moved in the opposite direction. It fell from 119 days to 114 days, a 4.2% improvement. The divergence suggests a small number of slow-moving listings are pulling the average higher, while the typical home is actually selling faster than it did a year ago.
Geography shifts dramatically
The most striking finding in the Q1 data is where new homes are being built and sold. Johnson City surged from 24 sales last year to 47 in Q1. That’s a 95.8% increase, making it the region’s top new construction market for the quarter. Kingsport had the highest percentage growth since sales more than doubled from 14 to 33 sales, up 135.7%.
Those gains came largely at the expense of markets that dominated a year ago. Jonesborough, which led the region with 39 sales last year, dropped to 22. Bristol sales dropped from 24 to five, and Blountville fell from 21 to 15 sales.
Greeneville posted a modest gain, rising from 20 to 24 sales, a 20% increase.
The geographic redistribution likely reflects where builders have active pipeline. Bristol’s sharp decline in particular may signal that developments that were active in early 2025 have closed out, with new phases or projects not yet reaching closing stage.
Financing mix shifts toward FHA
Conventional financing remained the dominant purchase method in both periods, accounting for 52.8% of Q1 2025 sales and rising slightly to 54.4% in Q1 2026. Cash buyers accounted for 19.5% of Q1 2026 closings, down from 21.1%.
The more notable shift was in government-backed loan programs. VA-backed sales fell from 15.6% of the market to 10.1%. FHA financing moved in the other direction, rising from 10.0% to 13.0%. THDA financing, which assists lower-income buyers, appeared for the first time in the Q1 dataset with two closings.
HOA communities fewer but costlier
The share of new home sales carrying a homeowner’s association fee declined in Q1. HOA-governed sales accounted for 63.3% of the quarter’s closings, down from 70.6% a year earlier. However, among communities that carry an HOA, monthly fees rose sharply. Average HOA fees climbed from $285 per month to $316 per month.