Cost of Living in Tennessee: Average Rent, Groceries, Utilities, and More

The cost of living in Tennessee offers a range of experiences, making it an appealing state for various lifestyles. Known for its iconic cities like Nashville and Memphis, Tennessee provides affordable living with no state income tax, helping residents keep more of their earnings. While Nashville’s rising popularity has driven up housing costs, Tennessee remains an affordable choice thanks to lower transportation and grocery expenses. In this article, we’ll break down the costs of living in Tennessee, giving you a clear picture of what life in the Volunteer State is like.

Housing costs: Median home prices and average rent in Tennessee

Housing costs in Tennessee offer a more budget-friendly option compared to the national averages. The median home sale price in Tennessee is around $383,000, significantly lower than the U.S. average of $428,000, making homeownership more attainable for many. For renters, the state remains relatively affordable, with the average rent in Tennessee at $1,374—well below the national average of $1,645. While cities like Nashville tend to have higher rents due to demand, many areas across the state offer reasonably priced housing, providing a range of options.

Tennessee housing costs: Average rents and median home sale prices

Housing costs in popular cities in Tennessee

Nashville

Nashville, known for its vibrant music scene, draws people from all over. It’s one of Tennessee’s more expensive cities, with the average rent for a one-bedroom apartment at $1,772 and a two-bedroom at $2,059. Buying a home in Nashville will also require a higher budget, with a median home sale price of $450,000. You can expect a lively atmosphere with various entertainment options, though you’ll pay a premium to be part of the city’s fast-paced lifestyle.

Read more: Should I Move to Nashville? 11 Pros and Cons

Memphis

Memphis has a more affordable living experience, with the average rent for a one-bedroom apartment at $1,180 and a two-bedroom at $1,308. The city also has a lower median home sale price at $180,000, making it a great option for first-time homebuyers. Known for its musical heritage, barbecue, and laid-back culture, Memphis offers a Southern charm that appeals to many. 

Read more: Should I Move to Memphis? 11 Pros and Cons

Knoxville

Knoxville combines natural beauty with a college-town atmosphere, thanks to the University of Tennessee. Average rent here is more moderate than in Nashville, with a one-bedroom costing $1,307 and a two-bedroom $1,490. The median home sale price in Knoxville is $339,000, reflecting its growing popularity. This city provides a balance of urban amenities and access to outdoor adventures, like the nearby Great Smoky Mountains.

Read more: Should I Move to Knoxville? 11 Pros and Cons

Chattanooga

Chattanooga has an average rent of $1,414 for a one-bedroom and $1,666 for a two-bedroom. With a median home price of $350,000, Chattanooga is relatively affordable, especially given its picturesque setting along the Tennessee River. The city is ideal for those who enjoy hiking, climbing, and exploring nature, while also offering a thriving downtown scene with arts, dining, and cultural events.

Utility costs stand slightly higher than you’d expect

Utility costs in Tennessee tend to be reasonable compared to other parts of the U.S., though they can vary based on factors like location and housing type. The average electric bill in Tennessee is around $145.49 per month, which is slightly above the national average but common for a southern state with hot summers. Internet and cable service typically add an extra $125.00 per month to household expenses, reflecting the region’s average rates for connectivity. Combined, these essential utilities create a predictable monthly cost, allowing residents to budget for reliable services.

Energy bill comparisons: Tennessee cities vs. nationwide average

Data from Redfin’s Cost of Living Calculator, November 2024

Grocery prices remain lower than the national average

Grocery costs in Tennessee are relatively affordable, with the state’s average monthly grocery bill at around $346.37, which is slightly below the national average of $354.50. Tennesseans benefit from this lower-than-average grocery cost, which adds to the state’s appeal as a budget-friendly place to live. While exact expenses can vary depending on shopping habits and family size, residents generally find that food costs are manageable, especially when shopping at popular local stores and farmers’ markets where fresh produce and local goods are readily available.

Transportation is on the cheaper side

Transportation costs in Tennessee are generally more affordable than in many parts of the U.S., largely due to lower gas prices, which average $2.75 per gallon compared to the national average of $3.08. This makes commuting more affordable, whether you’re traveling within a city or across the state. Public transportation options vary by city: in Nashville, a two-hour unlimited bus fare costs about $2, with monthly passes available for regular commuters. Car maintenance expenses, like oil changes and tire replacements, are also moderately priced, making vehicle upkeep manageable. 

The cost of healthcare is moderate

Healthcare costs in Tennessee are relatively moderate, offering some relief compared to national averages. A typical doctor visit across the state costs around $142.74, but prices can vary by city. For example, in Nashville, the cost is about 6% lower than the national average, with an average visit priced at $120.58. While these lower costs may benefit residents, healthcare expenses can still be a significant portion of the budget. 

Tennessee has an attractive tax structure

Tennessee’s tax structure is attractive for many residents, especially because it has no state income tax on wages. The state does, however, rely more heavily on sales tax, with a base rate of 7% on most goods, and local jurisdictions can add up to 2.75%, making the total sales tax potentially as high as 9.75% in some areas. Additionally, Tennessee’s property taxes are relatively low compared to national averages, with an effective property tax rate of around 0.56%. This tax structure, while benefiting workers, can impact the cost of goods and services, which may feel higher due to sales tax.

How much do I need to earn to live in Tennessee?

To live comfortably in Tennessee, it’s recommended that you spend no more than 30% of your monthly income on housing costs. For example, if you’re renting a one-bedroom apartment in Nashville for $1,772 per month, you should aim to earn at least $5,907 per month before taxes to stay within the 30% rule. This translates to an annual income of around $70,884. If you’re living in more affordable areas like Memphis, where the average rent for a one-bedroom apartment is $1,180, you could manage on a lower income, around $3,933 per month, or about $47,196 annually. 

Methodology

Average 1-bedroom and 2-bedroom rent sourced from Rent. Median home sale price, state average monthly rent, national rent prices, and cost of living data sourced from Redfin.