Despite snow, rising interest rates and stubbornly high unemployment, more Middle Tennesseans bought homes last month than in January 2010, giving new hope that the housing market may be recovering from the recession.

“I think people are feeling better about things, better consumer confidence,” says Frances Garner, a Realtor with Parks Properties in Green Hills.

In Nashville, 512 homes were sold last month, compared with 477 in January 2010, according to a report by Chandler Reports. Last month’s average price was $174,508, down 6.3 percent from $186,305 in January 2010.

“Prices definitely dropped” as they continued their decline from the market’s peak around 2005, says Marcie Sweet, affiliate broker with Keller Williams in Burton Hills.

In suburban Williamson County, the number of home sales increased to 189 in January, up from 148 a year ago, according to Chandler Reports. Prices increased 8.4 percent to an average of $397,466 in January 2011 from an average of $366,544 in January 2010.

East of Nashville in Wilson County, 114 houses were purchased last month compared with 70 a year earlier. The average price fell 2 percent to $194,573 from $198,520 in January 2010. More than half of those sales were in the fast-growing city of Mt. Juliet, where 59 homes were purchased. The average price in the city was $225,104, virtually unchanged from $224,906 in January 2010.

Throughout the entire Middle Tennessee region, there were 1,101 closings reported in January, according to the Greater Nashville Association of Realtors, a 6.6 percent increase from 1,033 closings in the same period last year.

When the entire region is included, the median price for a single-family home during January was $165,500, $131,500 for a condominium. In January 2010 the median residential and condominium prices were $159,000 and $154,550, respectively, according to the GNAR.

Overall inventory, the number of homes on the market, fell as well. In January 2010 there were 13,414 houses and 2,293 condominiums on the market. Last month there were 12,595 houses and 1,922 condos listed for sale.

GNAR President Alice Walker points out the market’s performance last month was “especially encouraging” because sales increased despite the absence of the federal first-time home buyers tax credit. In January 2010, new home owners could qualify for an $8,000 tax credit. The credit expired last year and was not available to buyers last month.

“Also, having this increase at a time when winter weather has been so challenging in Middle Tennessee makes the improvement even more significant. The January data is another example of positive economic news from this region as well as from across the country, which may signal the beginning of a broader overall recovery,” Walker says.

Garner says she is seeing more interest among buyers.

Buyers have not been discouraged by interest rates, which have risen to about 4.875 percent, with one point, for a 30-year fixed mortgage. A few months ago the average rate was about 4.25 percent, says Shawn Meehan with Birchfield Mortgage in Nashville.