From the rolling hills of Middle Tennessee to the vibrant music scenes of Memphis and Nashville, the Volunteer State has much to offer. Known for its southern hospitality, low taxes, and relatively moderate home prices—compared to many coastal regions—Tennessee has become a magnet for new residents.
In this detailed guide, you’ll find everything from historical rent and home price data to insights on utilities, transportation, healthcare, and more. We’ll also highlight key differences among major cities like Nashville, Memphis, Knoxville, and Chattanooga.
1. Understanding Tennessee’s Cost of Living
Tennessee has traditionally been considered one of the more affordable states in the U.S., thanks to factors like no state income tax on wages and moderate property values.
However, recent population growth—especially in metropolitan areas—has driven up housing costs and increased competition for rentals. Despite these changes, many residents still find the overall cost to be lower than in states like California, New York, or Massachusetts.
One notable benefit is the state’s diverse geography. People can choose among bustling cities, smaller suburban areas, or rural counties with plentiful farmland. Each region has unique cost drivers, so exploring several parts of Tennessee is recommended before settling on a location.
2. Housing Costs: Past & Present
Housing often takes the largest chunk out of monthly budgets. Whether you plan to rent in downtown Nashville or buy a home in a quieter suburb, it’s wise to understand the trends that have shaped Tennessee’s real estate market since 2010.
2.1 Rental Price Evolution (2010-2025)
The following numbers represent an approximate average monthly rent for a one-bedroom apartment in or near the city center of major Tennessee metros (e.g., Nashville, Memphis, Knoxville). These figures give a general snapshot, but note that actual rents can vary significantly by neighborhood:
- 2010: $700 (source)
- 2015: $850 (source)
- 2020: $1,000 (source)
- 2024: $1,200 (source)
- 2025: $1,250 (source)
Tennessee’s population surge—especially in metropolitan areas—has contributed to a tighter rental market, nudging up prices. Nashville, for instance, has grown into a major entertainment and tech hub, attracting both corporate relocations and creative professionals. Memphis and Knoxville also have stable job markets, fueled by logistics, healthcare, and education sectors.
That said, even in areas where rents have risen, Tennessee generally remains more affordable than many high-cost coastal cities. Suburban and smaller-town options often provide even lower monthly rent, making relocating to Tennessee an appealing prospect for those seeking an economical lifestyle.
2.2 Homebuying in Tennessee
Many prospective homeowners are drawn to Tennessee’s relatively moderate real estate prices. Below is a rough look at the median home sale price statewide:
- 2010: $150,000 (source)
- 2015: $180,000 (source)
- 2020: $220,000 (source)
- 2024: $260,000 (source)
- 2025: $280,000 (source)
These figures naturally mask regional variations. Nashville’s median can exceed $400,000, while smaller cities like Jackson or Clarksville maintain more budget-friendly averages in the $200,000–$250,000 range.
Tennessee’s no-income-tax policy can help offset mortgage costs, but property taxes, maintenance, and homeowner’s insurance still need to be considered. Overall, many find homeownership in the Volunteer State more attainable than in pricier coastal locations.
3. Utilities & Energy Expenses
Tennessee’s four distinct seasons influence utility costs. Winter months typically require moderate heating, while hot, humid summers can push up air conditioning bills. Compared to many northern states, winter utility costs can be lower—though summertime electricity usage can be considerable, especially if you rely heavily on air conditioning.
3.1 Historical Utility Costs (2010-2025)
Below is an approximate monthly utility bill (electricity, heating, water, and trash) for an 900 sq. ft. apartment or small home:
Residents in urban areas like Memphis or Nashville might see slightly higher bills, in part due to city water rates or older housing stock. Meanwhile, those in rural zones—where natural gas lines may be limited—often use electricity for both heating and cooling. If you plan to move to an older home, budgeting for potential insulation or HVAC upgrades is wise to keep monthly bills manageable.
3.2 Tips for Reducing Utility Bills
- Insulate & Weatherproof: Adding insulation or sealing windows/doors can lower both heating and cooling costs.
- Smart Thermostats: Automate temperature settings and save during off-peak hours.
- Energy Audits: Many utilities offer free or discounted home energy audits to identify inefficiencies.
- Solar Incentives: Tennessee offers some renewable energy programs, though less robust than in certain other states.
4. Transportation Costs
Tennessee is largely car-centric, but urban centers like Nashville and Memphis offer limited public transportation through buses and, in Nashville’s case, a developing light rail system (WeGo Star). While vehicle ownership is common, gas prices and insurance costs tend to be moderate compared to national averages.
4.1 Commuting Trends (2010-2025)
Below is an approximate monthly transportation expense for a single commuter, covering gas, maintenance, and potential public transit use in larger cities:
Gasoline prices in Tennessee generally stay below the national average, often influenced by the state’s relatively low gas taxes. Still, if you live in downtown Nashville or near your workplace in Memphis, you could potentially skip a car for daily commutes, relying instead on rideshares, bikes, or existing bus lines. However, limited suburban transit coverage can make vehicle ownership essential for many Tennesseans.
4.2 Car Ownership vs. Public Transit
Choosing between car ownership and public transit often depends on location.
Nashville, for example, has made strides in expanding bus routes and building pedestrian-friendly hubs, yet remains far from an ideal “car-free” city. Memphis has MATA buses, but coverage can be spotty in suburban areas.
In Knoxville and Chattanooga, personal vehicles are likewise common, though both cities have taken steps to grow their bus systems and introduce greenways for biking or walking.
5. Food & Grocery Costs
Tennessee’s food scene is an eclectic blend of traditional Southern fare, international influences, and farm-to-table freshness. Whether you shop at major grocery chains, frequent farmer’s markets, or dine out regularly, it’s important to understand how these costs fit into your monthly budget.
5.1 Grocery Price Trends (2010-2025)
Below are estimated monthly grocery expenses for one adult cooking most meals at home:
Big-box retailers like Walmart and Costco, along with regional chains such as Kroger or Publix, often keep Tennessee’s grocery costs relatively moderate.
Prices in Nashville might skew slightly higher than in smaller towns, but the difference isn’t usually drastic.
Many Tennesseans take advantage of local produce stands or farmers’ markets, adding fresh fruits and vegetables to their diets at competitive prices.
5.2 Dining Out in Tennessee
- Casual dining or fast-casual restaurant: $12–$18 per person
- Mid-range eatery: $20–$35 per person
- High-end restaurants (Nashville, Memphis): $50+ per person
Music hotspots like Lower Broadway in Nashville or Beale Street in Memphis offer diverse dining options alongside live entertainment, which can hike your total night-out expense. Knoxville’s Market Square also features an array of restaurants and bars that cater to University of Tennessee students and locals alike. If you love trying new restaurants and going out frequently, budget accordingly—though you’ll still likely spend less than you would in larger, more expensive U.S. cities.
6. Healthcare & Insurance
Healthcare in Tennessee varies from cutting-edge hospitals in major cities to smaller clinics and rural health centers in more remote areas.
Major hospital systems, such as Vanderbilt University Medical Center in Nashville and St. Jude Children’s Research Hospital in Memphis, have bolstered the state’s reputation for quality care.
However, costs can fluctuate widely, depending on your insurance plan and network.
6.1 Healthcare Cost Progression (2010-2025)
Monthly premiums for an individual policy, on average:
Rural communities may have fewer provider options, potentially leading to higher out-of-pocket expenses if you need specialized care in a bigger city.
Conversely, those in metropolitan areas generally enjoy broad insurance networks but face higher insurance premiums overall.
Employers often subsidize much of the cost; if you’re self-employed, exploring Tennessee’s marketplace plans or potential tax credits could help control monthly costs.
7. Education & Childcare
Families and students have multiple educational paths to choose from in Tennessee.
There are robust public school systems (some stronger than others), a range of private or charter schools, and major universities like the University of Tennessee, Vanderbilt, and Tennessee State University.
Childcare, from daycare to after-school programs, can significantly impact monthly budgets.
7.1 Childcare Costs
Quality preschool or daycare programs can cost $800–$1,200 per month per child, depending on the location and curriculum.
Urban centers like Nashville or Franklin may lean toward the higher end of this range.
For after-school programs or extracurricular activities, plan on at least $200–$300 per month per child.
7.2 Public vs. Private Schools
- Public Schools: No tuition, but extracurricular fees, uniforms, or supply costs can add up. School quality and ratings vary widely by district.
- Private Schools: Tuition could range from $5,000 at certain religious schools to $20,000+ at elite academies. Keep an eye on scholarship or financial aid opportunities.
Tennessee’s education expenses remain manageable relative to the national average, but thorough research is key, particularly if you’re relocating from out of state and want a specific school district.
8. Taxes & Other Fees
One of Tennessee’s major draws is the absence of state income tax on wages and salaries. The state does impose the “Hall Income Tax” on interest and dividend income, though it’s being phased out and set to reach 0% soon. Meanwhile, sales tax and property taxes fund most of the state’s public services.
8.1 Property Tax Progression (2010-2025)
Annual property taxes for a median-priced home in Tennessee:
- 2010: $1,200 (source)
- 2015: $1,400 (source)
- 2020: $1,700 (source)
- 2024: $1,900 (source)
- 2025: $2,000 (source)
These figures vary by county. Shelby County (Memphis) and Davidson County (Nashville) may run higher, while rural counties often feature lower rates. Tennessee’s local sales tax can push combined sales taxes to 9.5% or more in some areas, which affects daily purchases. Still, the overall tax structure can be beneficial for retirees or high earners, especially since there’s no broad-based income tax on wages.
9. Entertainment & Lifestyle
Tennessee’s entertainment and cultural scene is diverse—live music in Nashville, blues and rock in Memphis, outdoor adventures near the Great Smoky Mountains, and college sports fervor in Knoxville. While these activities enrich life in the Volunteer State, they can also influence your monthly budget.
9.1 Cultural Events & Attractions
- Concert Tickets (Major Venues): $50–$100
- State Parks & Outdoor Recreation: Usually free or low-cost; some campsites charge $10–$30 per night
- Museums (Nashville, Memphis): $10–$25 for general admission
9.2 Dining & Nightlife
The cost of nightlife and restaurants varies significantly between metro areas and smaller towns.
In Nashville’s honky-tonk district, a night out can easily run $50–$100 per person when factoring in drinks and cover charges.
Memphis’s Beale Street features a mix of casual bars and fine-dining establishments, while Knoxville’s downtown offers a range of breweries and eateries.
Those living in smaller towns or suburban neighborhoods often enjoy more budget-friendly options.
10. Spotlight: Major Cities & Regions in Tennessee
Whether you prefer big-city amenities or a quiet suburban life, Tennessee has diverse regions to explore. Let’s look at some of the state’s primary cities and how they stack up in terms of cost and lifestyle:
10.1 Nashville
- Rent (1-bedroom 2025 avg.): $1,400–$1,600
- Main Industries: Music, healthcare, tech, tourism
- Cost Drivers: High demand for housing, growing job market, tourism-driven economy
10.2 Memphis
- Rent (1-bedroom 2025 avg.): $900–$1,100
- Main Industries: Logistics (FedEx hub), healthcare, manufacturing
- Cost Drivers: Lower housing costs than Nashville, but property tax rates can be higher in some parts of Shelby County
10.3 Knoxville
- Rent (1-bedroom 2025 avg.): $850–$1,050
- Main Industries: Education (University of Tennessee), retail, technology
- Cost Drivers: Student-driven market, moderate but steady real estate growth
10.4 Chattanooga
- Rent (1-bedroom 2025 avg.): $900–$1,200
- Main Industries: Automotive manufacturing (Volkswagen), tourism, tech startups
- Cost Drivers: Revitalized downtown, scenic attractions, moderate housing demand
11. Employment & Income Levels
Tennessee’s growing industries—logistics, healthcare, music, tourism, and automotive—fuel steady job creation. Although wages might not match those in major coastal hubs, the state’s lower overall cost of living often balances the equation for many families.
11.1 Salary Growth (2010-2025)
Below is a rough look at median household income across Tennessee:
- 2010: $42,000 (source)
- 2015: $47,000 (source)
- 2020: $52,000 (source)
- 2024: $57,000 (source)
- 2025: $60,000 (source)
Nashville typically tops the state in terms of average incomes, followed by Knoxville and Chattanooga. Memphis has a wide range of incomes due to a mix of corporate headquarters and lower-wage service jobs. Whether you’re a tech professional, creative entrepreneur, or healthcare specialist, you’ll find a range of opportunities—just be sure to weigh potential earnings against local costs.
12. Budgeting Tips for Tennessee Newcomers
Planning to relocate to Tennessee? Here are some targeted strategies to help keep your finances on track:
- Explore Suburbs & Smaller Cities: If Nashville’s or Memphis’s rents are too high, consider outlying areas like Gallatin, Murfreesboro, or Bartlett.
- Embrace Local Markets: Shop at farmer’s markets and produce stands for fresh, affordable foods.
- Review Insurance Options: From health plans to auto insurance, compare policies for the best rates given your location and vehicle use.
- Leverage State Tax Perks: With no broad-based income tax, your paycheck can stretch further—just be mindful of sales tax and property taxes.
- Track Monthly Spending: Apps like Mint or EveryDollar can help you see where your money goes each month, enabling adjustments as needed.
13. Future Outlook for 2025 and Beyond
Tennessee’s population is expected to keep growing well into the latter half of the decade. Economic forecasts point to ongoing expansion in healthcare, logistics, and entertainment—sectors that have long underpinned the state’s prosperity.
This upward trend likely means continued demand for housing, potentially driving up both rents and home prices, especially in popular metro areas.
On the flip side, potential improvements in public infrastructure—such as expanded mass transit in Nashville, roadway projects in Memphis, and broadband enhancements in rural areas—could distribute growth more evenly.
Remote work trends may also lead some professionals to settle in smaller towns, boosting local economies without significantly straining housing supplies.
14. Quick Takeaways
- Tennessee remains relatively affordable compared to many U.S. states, but urban hotspots like Nashville have seen steep rent and home price increases.
- Average utility bills hover around $160 per month in 2025, though summers can push air conditioning costs higher.
- Car ownership is common, but transportation costs (gas, insurance, maintenance) generally stay below national averages.
- Groceries average around $320 monthly for a single adult, with farmer’s markets providing fresh, local options.
- Healthcare expenses can vary; monthly premiums are about $400 for individual plans in 2025.
- No state income tax on wages allows many households to stretch paychecks further, but sales and property taxes help fund public services.
- Major metros each have unique cost drivers, so researching neighborhoods and suburbs is key to budgeting effectively.
15. Conclusion
With its blend of bustling metros, scenic landscapes, and notable tax advantages, Tennessee appeals to a wide range of newcomers—from young professionals to retirees.
Still, the cost of living in Tennessee isn’t monolithic; it varies significantly between Nashville’s trendy neighborhoods, Memphis’s historic districts, and the quieter suburbs or rural areas dotting the state.
For 2025 and beyond, housing markets look poised for continued growth, especially near job hubs. At the same time, relatively moderate utility bills, the absence of income tax, and abundant natural amenities make the state an attractive destination.
