Is the real estate market going up? Is it going down? It all depends on the day, it seems. The housing market did cool somewhat in 2023 in many cities across the country. And so far, 2024 has already been all over the place.

But after falling to a 28-year low in 2023, existing home sales will gradually rebound as mortgage rates decline, U.S. News & World Report predicts. Most market forecasters are predicting a steady increase through the next few years − and Knoxville, which has been fairly well insulated from any softening of the real estate market, is poised to continue an upward trajectory.

Where are home prices heading through 2025? Nowhere but up in Knoxville

After falling 0.8% year-over-year through December 2023, home prices tracked by the National Association of Realtors are forecast to rebound by 1.8% by the end of 2024. By 2025 through 2028, home prices are predicted to rise more gradually at about a percentage point above the rate of inflation, for an estimated increase of 13% to 14% from 2023 levels.

Knoxville is projected to have the biggest home value increase in the South in 2025, according to a new GOBankingRates report.

A research team analyzed Zillow data for dozens of the largest housing markets in the South, examining average home values in February 2024 versus projected average home values in February 2025. The team then compiled a list of Southern cities where home values are expected to grow at least 3%, with Knoxville topping the list with a projected 5.1% projected value growth over next year.

Other East Tennessee cities also made the cut; Greeneville was No. 6 with a 3.7% anticipated increase in home values while Johnson City was No. 26 with a 3.2% jump.

Knoxville also ranked as a hot real estate market nationally

Construction Coverage, which helps builders and real estate professionals make smarter business decisions, just released a new report about the hottest real estate markets in the U.S. that ranked Knoxville's housing market 64th out of 122 midsize cities.

To determine the locations with the hottest real estate markets in 2024, researchers created a composite score equally weighting the following metrics, using data from Redfin:

• One-year change in median sale price (December 2022–December 2023)

• Share of homes that sold above asking (2023)

• Median number of days on the market (2023)

• Average sale-to-list percentage (2023)

• Share of listings with price drops (2023)

As of December 2023, the median home sale price in Knoxville was $305,500, representing an increase of 9.5% from one year prior. The study found 35% of Knoxville homes sold over their asking price last year, after spending a median 40.2 days on the market.

While Knoxville's composite score placed the city in firmly in the middle of the pack, there was one factor where it rose to the top: the increase in home value. Knoxville ranked No. 3 of 122 cities (9.5%), with only Chula Vista, Calif. (9.9%), and Orlando, Fla. (9.7%), showing higher year over year increases.

Liz Kellar is a Tennessee Connect reporter. Email liz.kellar@knoxnews.com.

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This article originally appeared on Knoxville News Sentinel: Knoxville home values projected to continue to increase. See how much