What Is The True Cost Of Living In Tennessee

Felix Homes

Apr 10th 2021

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Over the last couple of decades, people have found plenty of reasons to move to Tennessee. Cool cities, beautiful scenery and plenty of jobs are some things that have attracted nearly 600,000 people to the state since 2010. Of course, there's also another factor: cost of living. Living in Tennessee has been a bargain for years, but just how affordable is the state? To find out, we've broken down how Tennessee scores on the elements that make up the cost of living index.

How Is The Cost Of Living Index Calculated

This index is essentially a cost of living calculator that accounts for key living costs like food, healthcare, and housing, then compares those to the national average. The national average is expressed as 100. Numbers below that average represent a lower-than-average cost of living, while numbers above 100 express a higher cost of living. Each living cost is measured based on its relationship to that average. For instance, if food costs thirty cents less in Alaska than the average, then Alaska is assigned a food cost of 70. Once you've determined each living cost for a state, then you give weight to each category based on how much of a budget it tends to command. For instance, housing costs are weighted more heavily than food because they usually take up more of the budget. Finally, the weighted categories are averaged to determine the state's total cost of living. Whew, now let's move on to Tennessee...

Is Tennessee A Cheap State To Live In?

In short, Tennessee enjoys an especially low cost of living. According to a study conducted by the World Population Review, in 2021 Tennessee is the country's sixth cheapest state to live in. That's pretty standard for The Volunteer State, where living costs have historically landed it in the top ten for affordability.

Grocery costs

Tennessee's grocery bills are rated a 95 according to our cost of living calculator, which means that groceries tend to cost 5% less than the U.S. average. This might not seem like much, but five cents on the dollar adds up quickly when you're feeding a family. Tennessee and its surrounding region are home to robust agricultural production and food processing that efficiently provide affordable grocery options. This grocery discount is just another small factor that makes a big difference in the Tennessee cost of living.

Housing costs

Cost of buying a home in Tennessee

As in any state, Tennessee housing values can vary dramatically based on the area where you're looking to buy. Still, as long as you aren't browsing in Nashville's swankiest neighborhoods, you can expect to pay well below the national average. Tennessee's median home value is around $165,000. That's around $65,000 less than the national average, and represents a huge cost of living advantage for the state. Even attractive urban areas offer affordable housing options. Chattanooga, for instance boasts a remarkably reasonable median home cost of only $150,100. Options, like these, offer big city living at small-town prices.

Cost of renting a home in Tennessee

The Tennessee rental market is also quite accessible. Rent for all types of properties usually rests 20%-30% below the national average. That means a studio apartment throughout much of the state rents for around $600, while a three-bedroom house can be found for just over $1100. This varies by location and city, for instance, Nashville rent options are normally just above average. All things considered, though, in Tennessee you'll find some of the best median rent prices in the country.

Healthcare costs

Healthcare costs in Tennessee aren't optimal in every location. Not every place has an ideal supply of doctors, and the population is prone to some indulgences that don't always lead to the highest overall health rankings. Despite these drawbacks, some of the most expensive areas actually have the most reasonable health-related costs. Davidson county, home to Nashville, boasts remarkably cheap health bills compared to the rest of the state.

Utility costs

The cost of utilities, across nearly all of Tennessee, are 4%-5% lower than the average in the United States. This is thanks largely to the awesome energy generation of the TVA and the state's abundance of freshwater. Services like these help provide for even the most rural, remote locations at a price that doesn't harm the overall cost of living.

Transportation costs

Getting around Tennessee is a surprisingly easy proposition. Modest gas prices and shorter-than-average commutes will consistently keep money in your pockets. Tennesseeans spend less time in their cars on an annual basis than most other U.S. residents, which leaves more room in the budget for new arrivals to explore the rest of the state.

How Much Are Taxes In Tennessee

Property taxes

Tennessee has no state property taxes, and leaves it up to local jurisdictions to determine and collect their own. Fortunately, most of these local governments keep tax rates modest. Urban areas have higher tax rates of around .820% of assessed value, while the state average is just .640%. Compared to the national average of 1.070%, these property tax thresholds are quite low, and represent huge long-term savings relative to other parts of the U.S.

Sales tax

Tennessee's sales taxes are higher than some other states, but that ensures that the state's millions of visitors are helping foot the bill for services that residents enjoy. On a state level, the tax on food is 5%, while most everything else includes a 7% sales tax. There's also an option for local governments to tack a little extra onto that rate. However, considering the tax breaks across the rest of the state's books, the sales tax is fairly reasonable.

State income tax

The rumors are true! Tennessee has no state income tax. That means you pay nothing to the state for the money you make.

Capital gains/pension tax

Tennessee does tax your gains on investments. So you'll have to pay back small percentages of your stock dividends and bond interest. However, there's no state pension tax, so retirees who call Tennessee home find that their dollars go a long way.

Is It Expensive To Live In Tennessee

According to all these factors, Tennessee is simply one of the most budget-friendly states in the U.S. As long as you don't plan on living in the most luxurious of Nashville suburbs, your cost of living is exceedingly reasonable. Places like Chattanooga and Memphis offer some of the most manageable suburban real estate in the country. Then smaller but charming cities, like Clarksville and Johnson City, make living in Tennessee an even better bargain. But even if you do call Nashville home, you're paying to live in one of the most attractive, up-and-coming cities in the country. It's simply the kind of place where the cost of living is a little higher because everyone wants to live there.

The cost of living in Tennessee is especially impressive because the area provides such great value. Conveniently-located, low cost cities are dotted throughout the state, all offering distinctly different lifestyles and entertainment options. Combine that with some of the best cultural experiences and natural beauty that the United States has to offer, and Tennessee doesn't just provide limited cost of living, but high quality of life. Between the housing bargains, forgiving taxes (don't forget that income tax break), and feasible living expenses, there just aren't many places like it to call home.

How Does the Cost of Living in Tennessee Compare to the National Average?

As you might expect based on previous sections, living in Tennessee is one of the most budget-friendly decisions you can make in the entire United States. Rural areas, while never too far from a city, offer a cost of living that's sometimes 30%-40% below the national average. Even second-tier cities like Chattanooga are well below the national average according to our cost of living calculator. Nashville, for all its style and status as the most expensive place to live in the state, still comes in at just above the national average for cost of living. Basically, wherever you reside in Tennessee, you're getting a spectacular value compared to just about every other place in the country.

States with the highest cost of living

Hawaii

The real estate and grocery prices on this remote island location are astronomical. Considering the state's lack of accessibility and space, this is no great surprise.

California

Median home values are staggering, and high gas prices keep transportation expensive. This helps explain why Nashville has seen a steady flow of Californians making the move to Tennessee.

New York

You've heard this story before. High taxes, a large population, and cutthroat competition for resources make the Big Apple an expensive bite.

Oregon

Ironically enough, private land is limited in the Beaver State, which means housing expenses can be high. This, along with a bloated tax policy and upper-tier transportation costs, makes for an unpleasant cost of living threshold.

Massachusetts

Another densely populated Northeastern state where people pay a lot of money for a little space.

States with the lowest cost of living

Mississippi

Plenty of ports, agriculture, and cheap housing make Mississippi an unbelievably attainable place to call home.

Arkansas

Costs like housing and taxes are negligible in Arkansas compared to other parts of the U.S.

Oklahoma

Oklahoma's central location helps keep prices down, as it's never far from natural resources. This means it doesn't take much money to build houses or snag some food.

Missouri

Home to the cheapest gas in the country and everything else is quite reasonable as well.

New Mexico

New Mexico is at the front of the cost of living pack in nearly every category but groceries.

Cities In Tennessee With The Highest Cost Of Living

Brentwood

City in Nashville, Tennessee

Population: 50,596

Average Sales Price: $832,032

Felix Rating - 4/5
2/5 Cost of Living
2/5 Transportation
4/5 Dining & Nightlife
5/5 Schools
5/5 Safety
4/5 Things to Do

What is Brentwood known for?

Those seeking the epitome of stately southern charm just barely removed from the downtown Nashville bustle need look no further than Brentwood, one of Nashville's preeminent neighborhoods. Brentwood’s appeal is as much about convenience as it is about luxury. Located in Williamson County, Brentwood is also home to an impressive network of small local parks just south of Radnor Lake State Park and Percy Warner Park, two of Nashville's best urban recreational areas. Throw in that fifteen-minute drive to Downtown Nashville, and it’s not hard to understand why finding your dream home in Brentwood can afford to demand such a steep barrier to entry. Brentwood is not the most walkable community so most errands will require a car.

Who is Brentwood a good fit for?

Brentwood is a tranquil, peaceful suburb and features an easy commute to downtown Nashville. Although Brentwood is one of Tennessee’s most popular suburbs due to its appealing atmosphere and beautiful houses, its high cost of living makes this area most suitable for couples, retirees, and families of a middle-to-high income. Ranked #20 on Money.com’s 100 Best Places to Live in 2017, Brentwood’s charm and beautiful setting are strong pulls for potential residents.

Where is Brentwood located?

Brentwood is located approximately 10 miles directly south of Nashville and is an easy, straightforward commute. I-65 runs through the middle of Brentwood, making it simple to quickly access surrounding areas.

Image of a single family home in Arrington Tennessee

Arrington

City in Nashville, Tennessee

Population: 2,237

Average Sales Price: $700,567

Felix Rating - 3/5
2/5 Cost of Living
2/5 Transportation
3/5 Dining & Nightlife
5/5 Schools
5/5 Safety
3/5 Things to Do

Photos of Arrington

What is Arrington known for?

Those looking to get in on the ground level of Nashville’s next blossoming suburb need look no further than Arrington. This unincorporated community, already known for its rolling green hills and elegant wines, has all the makings of a residential Eden, and developers are beginning to take notice. Just off of I-840, less than a half-hour south of Nashville and ten miles away from Franklin, Arrington retains a rare pastoral purity within the city’s metro area. Arrington is strongly connected to Nolensville, another prospering Nashville suburb, which means it shares many characteristics with its larger counterpart.

Who is Arrington a good fit for?

One of Tennessee’s most beautiful rural areas with an upscale twist, Arrington is becoming a very popular area to reside. Retirees enjoy the peacefulness of this tranquil area, while families love the open spaces, larger housing options, and reputable school system. This area is less popular among young professionals and couples due to its distance from Nashville and minimal renting options.

Where is Arrington located?

Arrington is located approximately 26 miles directly south of Nashville, surrounded by I-65, 840, and I-24. Despite the longer distance from Nashville, it is a fairly straightforward commute into the city because of the close proximity of these three major highways.

Image of Main Street in Downtown Franklin Tennessee

Franklin

City in Nashville, Tennessee

Population: 96,028

Average Sales Price: $655,473

Felix Rating - 4/5
2/5 Cost of Living
3/5 Transportation
5/5 Dining & Nightlife
5/5 Schools
5/5 Safety
5/5 Things to Do

Photos of Franklin

What is Franklin known for?

If you’re looking for upscale homes without the hassle and traffic found near the suburbs adjacent to downtown Nashville, then Franklin is your ideal suburban experience. Split between Davidson County and Williamson County (of which Franklin is the county seat), Franklin is known for its downtown historic Victorian single-family homes and the sprawling lots with farmhouse style homes on multiple acres. Everything about Franklin sparkles with a touch of class that caters mostly to white-collar workers. Perhaps that’s why people who come to Franklin are usually there to stay. Historic downtown Franklin is known for being America's favorite main street and is lined with trendy boutiques and restaurants. Cool Springs is Franklin's main commercial center where you can find new construction single-family homes with desirable open floorplans as well as condos and townhomes.

Who is Franklin a good fit for?

Franklin offers the best of both worlds for many folks interested in making the move to Nashville. Its close proximity to the excitement of downtown, combined with its quiet, picturesque suburban life, makes this area a top choice for families, couples, and retirees with middle-upper income.

Where is Franklin located?

Franklin is located approximately 20 miles south of Nashville and is an easy, straight-forward commute to downtown.

Image of a single family home in Nolensville Tennessee

Nolensville

City in Nashville, Tennessee

Population: 11,759

Average Sales Price: $546,006

Felix Rating - 4/5
4/5 Cost of Living
3/5 Transportation
3/5 Dining & Nightlife
5/5 Schools
5/5 Safety
3/5 Things to Do

Photos of Nolensville

What is Nolensville known for?

This town about twenty miles outside Nashville is proof that the American rags-to-riches story applies to more than just people. Nolensville, after reincorporating in 1996, was just barely a blip on the Nashville-Metro radar with a population of just over 3,000 at the turn of the century. In the last twenty years, though, that population has more than tripled, and the housing market has followed suit.

Who is Nolensville a good fit for?

Nolensville is a quaint and historic town about twenty minutes south of the Nashville city limits. This scenic town illuminates the beauty of the countryside within a short commute to the big city. Families, those seeking a slower paced lifestyle, and retirees find plenty to stay busy within Nolensville or a short drive north to the Lenox Village neighborhood. Nolensville offers refuge from the city with plenty of new construction homes. You won’t find many young professionals in this small town, though, since this area can be considered more “sleepy” than other nearby neighborhoods.

Where is Nolensville located?

Scenic Nolensville is located between I-24 and I-65 about 30 minutes south of downtown. Many Nolensville residents use Nolensville Pike to travel north to Nashville. Most either cut over to I-65 via Concord Road or take Nolensville Pike all the way north to the downtown area.

Image of a single family home in Thompson's Station Tennessee

Thompsons Station

City in Nashville, Tennessee

Population: 10,333

Average Sales Price: $492,929

Felix Rating - 4/5
4/5 Cost of Living
3/5 Transportation
4/5 Dining & Nightlife
5/5 Schools
5/5 Safety
4/5 Things to Do

Photos of Thompsons Station

What is Thompsons Station known for?

We’ll pardon you for thinking that this land of arching back roads and rolling pastures couldn’t possibly exist only a half-hour drive from downtown Nashville. As areas like Spring Hill to the south, and Franklin to the north have emerged as real estate hot spots, Thompson’s Station—at least until recently— has managed to stay out of the spotlight. The result is a pastoral wonder that feels a little out of place right off of I-840. Let’s just say, at the end of the day, this well-kept secret is a special place to call home.

Cities In Tennessee With The Lowest Cost Of Living

Church Hill

City in Nashville, Tennessee

Population: 6,667

Average Sales Price: $132,800

Felix Rating - 4/5
5/5 Cost of Living
2/5 Transportation
3/5 Dining & Nightlife
3/5 Schools
5/5 Safety
3/5 Things to Do

Maryville

City in Nashville, Tennessee

Population: 28,974

Average Sales Price: $157,500

Felix Rating - 4/5
5/5 Cost of Living
3/5 Transportation
3/5 Dining & Nightlife
4/5 Schools
5/5 Safety
3/5 Things to Do

Who is Maryville a good fit for?

Maryville is a suburb within the metropolitan area of Knoxville, Tennessee. The location provides a dense suburban feel, with a population of roughly 28,000 people. You’ll find this mid-sized city serves as an ideal place for raising a family, as it offers exceptional area schools. It’s also very appealing due to its surrounding tourist destinations, such as the Great Smoky Mountains National Park.

Where is Maryville located?

The city of Maryville is centrally located in east Tennessee. It sits at the base of the Appalachian range and south of Knoxville. The area stretches over 17 square miles in size, surrounded by several small suburbs. Many consider its neighboring city, Alcoa, to be Maryville’s twin. The area is only a short drive from many famous tourist attractions and national state parks.

Atoka

City in Nashville, Tennessee

Population: 9,241

Average Sales Price: $174,800

Felix Rating - 4/5
5/5 Cost of Living
3/5 Transportation
3/5 Dining & Nightlife
4/5 Schools
5/5 Safety
3/5 Things to Do

Clarksville

City in Nashville, Tennessee

Population: 156,079

Average Sales Price: $231,879

Felix Rating - 3/5
5/5 Cost of Living
3/5 Transportation
3/5 Dining & Nightlife
3/5 Schools
3/5 Safety
3/5 Things to Do

What is Clarksville known for?

Perhaps Tennessee’s best-kept real estate secret, Clarksville is unlikely to stay hidden for long. This part-military, part-college town offers a rare mix of convenience, charm, and affordability—and people are starting to catch on. All this reflects a level of residential real estate activity that runs counter to the town’s laid-back southern elegance. At its core, Clarksville is a river town that shares a border with neighboring Kentucky. Downtown Clarksville arcs with the flow of Cumberland, and its college—Austin Peay State University—makes its home where the Cumberland meets the Red River. This link with the natural world influences Clarksville’s food culture (think southern-fried catfish), and its preferred pastimes. Expansive greenways wind along the river, and the stunning Dunbar Cave State Park is nearly at the center of the city’s footprint. These elements combine to offer a distinctive and accessible residential market that leaves a strong impression whether residents moving to Clarksville come for college, for the military, or for the rest of their lives.

La Vergne

City in Nashville, Tennessee

Population: 34,905

Average Sales Price: $248,586

Felix Rating - 3/5
5/5 Cost of Living
2/5 Transportation
3/5 Dining & Nightlife
2/5 Schools
3/5 Safety
3/5 Things to Do

What is La Vergne known for?

Like Antioch, it’s neighbor just up I-24, La Vergne is in the midst of an economic revitalization. Ingram Book Company, which started in the town as a small business in 2009, now employs 1,500 people. What’s more, Amazon has opened a massive new distribution center within La Vergne’s town limits, and companies like Sinomax and Talos Engineered Products have turned dormant factory space into productive economic contributors. La Vergne’s makeup is refreshingly diverse, with large Latino, African-American, and even African populations. Located in Rutherford County, La Vergne is feeling the positive effects of the Davidson County property tax increase as homeowners in neighboring Davidson County look to relocate. Similar to it’s neighbor Smyrna to the south, La Vergne enjoys it’s close proximity to Percy Priest Lake.