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Have you ever wondered what makes Tennessee such a popular place to call home? In 2024, the population of Tennessee was 7.23 million, a 1.11% increase from the previous year, showing that people keep choosing the Volunteer State as their new home.
From the music-filled streets of Nashville to the scenic beauty of the Great Smoky Mountains, Tennessee offers a unique mix of culture, affordability, and opportunity. This guide will walk you through everything you need to know about living costs, housing options, and what makes Tennessee special.
Why Do People Choose To Live Here?
Tennessee wins hearts with its perfect mix of southern charm and modern opportunities. The state earned its nickname “Volunteer State” because residents genuinely care about their communities and help their neighbors. You’ll find friendly faces everywhere, from small mountain towns to bustling cities like Memphis and Nashville.
The natural beauty here is breathtaking. The Great Smoky Mountains offer hiking trails and camping spots, while rivers and lakes provide fishing and boating fun. Music lovers feel right at home since Tennessee is the birthplace of country music, and festivals happen year-round. Plus, the weather gives you four seasons without extreme cold winters that last forever.
Housing Market Snapshot
Finding affordable housing in Tennessee feels much easier than in expensive states like California or New York. The median home price sits around $395,200, which gives families hope of owning their own place. Different areas offer various price ranges, from starter homes under $200,000 to luxury properties exceeding $1 million.
Rental Costs: Renters find budget-friendly options across the state. Average monthly rents are around $1,775 statewide. Studio apartments start around $1,314 monthly, while larger four-bed places rent for an average of $7,352. Rent prices vary by location:
- A two-bedroom apartment in downtown Nashville averages $1,800 monthly
- Memphis offers quality options closer to $1,300
- Smaller cities like Clarksville provide apartments for around $1,495
Market Trends: In 2025, Tennessee’s real estate market is shifting toward a more balanced and stable phase. Housing supply has risen nearly 17% year-over-year, providing more options for buyers. Home sales are up 0.5% since last year, and median days on market are now about 58, creating a more buyer-friendly environment.
Buyers can explore thousands of available properties, with about 46,868 active listings statewide offering choices from condos to sprawling farmhouses. More people move to Tennessee for bigger homes and better neighborhoods at affordable prices. This steady demand keeps the housing market strong but still affordable.
Daily Expenses
The cost of living in Tennessee is about 10% less than the national average. The average person spends about $46,173 per year to live comfortably in Tennessee. These costs make Tennessee one of the most budget-friendly states in America.
Here’s what you can expect to spend:
- Utilities: Tennessee residents spend about $186 per month on electricity. When you add cable, internet, and water, the total averages around $343 per month.
- Groceries: Food costs about 3% less than the national average. The typical Tennessee family spends around $270 per week on groceries.
- Transportation: Gas prices stay slightly less than the national average at about $3.10 per gallon. Car insurance costs less than in many other states.
Tax Benefits That Matter
Tennessee’s tax situation makes it incredibly attractive for residents. The state charges no personal income tax on your wages, which means you keep more of what you earn. Retirees especially love this because Social Security benefits and retirement account withdrawals aren’t taxed either.
Property taxes stay relatively low at about 0.58% of your home’s value. However, sales tax runs higher than in many states at around 9.64% combined state and local rates. This includes a 4% tax on groceries, which affects family budgets. Despite higher sales taxes, most people still save money overall compared to high-tax states.
Take control of your homebuying budget with smart tools on Houzeo—America’s best home buying website. Use Tennessee’s mortgage calculator to see your estimated monthly payments, including taxes, insurance, and HOA fees. Start planning for your dream home today!
What Are the Top Places to Call Home in Florida?
Tennessee offers strong career opportunities in healthcare, manufacturing, music, and education. College towns provide great atmospheres with reasonable living costs. Let’s explore the four best places to live in the Volunteer State.
1. Nashville
Nashville’s housing market includes everything from historic properties to modern condos and suburban neighborhoods. Prices are higher than in smaller Tennessee towns, with a median home price of about $479,900, but still reasonable compared to other major U.S. cities.
- Jobs & Industries: Healthcare, music, education, technology
- Major Employers: Vanderbilt University Medical Center, HCA Healthcare, Warner Music Group, Sony Music
- Neighborhoods: Music Row (entertainment industry), Green Hills (families & schools), Franklin (upscale suburban living)
- Lifestyle Perks: Live music scene, cultural events, dining hotspots, professional sports, and a thriving tourism industry
2. Memphis
Memphis delivers some of the most affordable big-city living in Tennessee, with a median home price around $185,000. The city blends historic charm with strong job opportunities in logistics, healthcare, and manufacturing, led by the FedEx headquarters.
- Jobs & Industries: Logistics, healthcare, manufacturing, agriculture
- Major Employers: FedEx, St. Jude Children’s Research Hospital, International Paper
- Neighborhoods: Bartlett (family-friendly suburbs), Downtown (walkable with restaurants and music venues), Germantown (upscale homes & top schools)
- Lifestyle Perks: Rich music history, barbecue culture, affordable cost of living, museums, and festivals
3. Knoxville
Knoxville offers a mix of college-town energy and family-oriented communities, with a median home price of around $330,000. The University of Tennessee anchors the city’s economy, alongside healthcare and manufacturing sectors.
- Jobs & Industries: Education, healthcare, manufacturing, technology
- Major Employers: University of Tennessee, Covenant Health, Oak Ridge National Laboratory
- Neighborhoods: Fountain City (affordable family living), Powell (suburban homes & parks), Sequoyah Hills (luxury homes)
- Lifestyle Perks: College sports, outdoor activities in the Smoky Mountains, local festivals, and a balanced urban-suburban lifestyle
4. Chattanooga
Chattanooga blends outdoor recreation with urban growth, maintaining affordability with median home prices near $380,000. Its location between mountains and rivers supports year-round activities like hiking, climbing, and kayaking.
- Jobs & Industries: Manufacturing, technology, tourism
- Major Employers: Volkswagen, Amazon, BlueCross BlueShield of Tennessee
- Neighborhoods: North Shore (trendy & walkable), Signal Mountain (scenic homes), Red Bank (affordable family options)
- Lifestyle Perks: Revitalized downtown, riverfront attractions, arts & entertainment, strong tech sector, and outdoor adventure opportunities
Tips for Homebuyers
- Get Pre-Approved for a Mortgage: Sort your finances before starting your search. It shows sellers you’re serious, helps define your budget, and strengthens your offers.
- Budget Well Beforehand: Tennessee offers programs that can help with upfront expenses, making it easier to get into your new home.
- Work With a Local Real Estate Agent: They can guide you through neighborhoods, pricing, and competitive markets, especially in high-demand areas like East Tennessee.
- Schedule a Home Inspection and Appraisal: Inspections reveal hidden issues, while appraisals ensure you’re paying a fair price.
- Explore First-Time Homebuyer Programs: Statewide options provide loans, counseling, educational resources, and tax benefits.
- Consider Your Lifestyle Needs: Factor in school districts, commute times, amenities, and neighborhood quality when choosing a home.
- Research New Constructions: Check builder reputations, community features, and attend inspections and walkthroughs during construction.
- Be Ready for Competitive Markets: Popular areas may have multiple offers, so stay flexible and act quickly when you find the right property.
What Are the Pros and Cons of Living in Tennessee?
Tennessee combines affordability, culture, and natural beauty in ways that attract diverse residents. Whether you prefer busy cities, college towns, or quiet rural communities, the state offers options for different needs and budgets. The lack of state income tax especially benefits retirees and working families.
Pros
- Low home prices and friendly, welcoming communities
- No state income tax saves thousands of dollars yearly
- Abundant outdoor recreation: mountains, rivers, and lakes
- Strong job markets in healthcare, education, logistics, and music
- Rich music and cultural heritage
Cons
- High sales tax affects everyday purchases
- Limited job opportunities in rural areas, especially in tech and finance
- Healthcare access and infrastructure may be limited in remote areas
- Some areas have higher crime rates
- Severe weather, including hot, humid summers, tornadoes, and ice storms
Is Tennessee a Good Place to Live?
Tennessee can be a great place to live in 2025 if you plan it strategically. By carefully researching neighborhoods, local job markets, and lifestyle factors, newcomers can find the right community to meet their needs.
With proper planning and informed choices, Tennessee offers a balanced mix of affordability, opportunity, and quality of life. This makes it an ideal place to settle down and build a future. However, retirees and those who want a relaxed lifestyle will also find neighborhoods that appeal to them.
Looking to move soon? Explore Tennessee homes for sale on Houzeo, America’s best homebuying app. Compare homes, save favorites, connect with agents, and submit offers, all from your phone. Download the free Houzeo app from the Apple App Store or the Google Play Store for free.
