Memphis Real Estate 2025: Yields, Demand, and Predictions
Memphis has solidified its reputation as America’s cash flow capital in 2025, offering investors a unique combination of affordability, strong rental yields, and resilient tenant demand. The city’s real estate market is characterized by a tightening supply, rising home prices, and growing interest from both local and out-of-state investors. With a median home price of $214,772 as of April 2025, reflecting a 7.6% increase from the previous month, Memphis presents a compelling case for investment. The market’s dynamics are further influenced by a significant drop in new construction, leading to increased competition for available properties. As we look ahead to 2026, understanding these trends is crucial for investors aiming to capitalize on Memphis’s real estate opportunities.
The Memphis real estate market in 2025 is marked by several key trends shaping investment strategies. Firstly, the city’s affordability continues to attract investors seeking high rental yields. With median home prices significantly lower than the national average, Memphis offers an entry point for investors looking to maximize returns. The average rental yield stands at approximately 7.8%, making it an attractive option for those focused on cash flow.
Secondly, the supply of available properties is tightening. While listings increased by 13.8% from March to April 2025, reaching 3,173 homes, this growth is insufficient to meet demand. New construction has slowed significantly — multifamily starts dropped by over 70% year-over-year in 2024, with completions projected to fall by 36% in 2025. This shrinking pipeline will likely continue to limit inventory, driving appreciation and competition.
Lastly, demand for rental properties remains robust. Net absorption is projected to exceed new deliveries by over 50%, supporting occupancy rates and projected rent growth of 2.4% by year-end. Investors can expect increased market stability as demand continues to outpace supply.
In this Memphis Real Estate 2025: Yields, Demand, and Predictions episode:
- Affordability and High Rental Yields – Memphis’s real estate market offers a unique combination of affordability and high rental yields. The median home price in April 2025 was $214,772. This affordability allows investors to achieve higher rental yields, with the average at approximately 7.8%. The city’s growing economy supports consistent tenant demand, making it attractive for investors focused on long-term cash flow.
- Tightening Supply and Decreased New Construction – The supply of properties is shrinking due to reduced new construction. Multifamily starts dropped over 70% in 2024, and completions are expected to fall 36% in 2025. This trend is tightening inventory, increasing home values, and putting pressure on available stock, which benefits current investors but poses a challenge for new entrants.
- Robust Rental Demand and Occupancy Rates – Despite rising prices, rental demand remains strong. Net absorption will outpace new supply by 50%, supporting healthy occupancy rates. Rent growth is projected to rise to 2.4% by year-end. This dynamic creates stability and potential appreciation for rental property owners in the Memphis market.
In summary, Memphis’s 2025 real estate market stands out for its affordability, high yields, and strong demand despite a tightening supply. The decrease in new construction and rising occupancy rates set the stage for further appreciation and investor gains. As we move toward 2026, strategic investments made today are likely to pay off handsomely. Whether focusing on long-term rentals, new construction in C+ markets, or Section 8 properties with guaranteed income, investors should consider Memphis a top-tier market for real estate investment. With the right strategy and timing, 2025 could be the gateway to significant profits in 2026.
About 5 O’Clock Somewhere Real Estate Investor Podcast
5 O’Clock Somewhere Real Estate Podcast throws out the script, brings common sense back to real estate, and has casual conversations about the one and only market that matters – Memphis! We’re not interested in what some real estate expert from California has to say because we know the truth: Memphis is where the smart investors put their money. Forget about Vegas, Nashville, and the rest of the country, Memphis is the blue-chip stock of the real estate world. We’ll tell you everything you need to know about why Memphis is the safest and hottest place to buy rental real estate, and how you can be a part of a smart investment.
If you would like to join the conversation, participate in an upcoming recording, or just call to bounce ideas off one of our team, you can call or text us at 901-692-7401. Or if you prefer send us a message.
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