Cost of Living in Tennessee 2026: City-by-City Breakdown & Budget Guide

Tennessee at a Glance: Key Numbers for 2026

Those statewide averages mask a significant range. Nashville — with its booming music industry, healthcare sector, and rapid population growth — has a cost of living index of roughly 103, placing it slightly above the national average. Chattanooga, known as the “Scenic City,” sits around 89. Memphis, despite being the state’s second-largest metro, comes in at about 90 — well below average. And Knoxville, gateway to the Great Smoky Mountains, offers the lowest major-city cost of living at approximately 86. For a broader perspective, see our full 50-state cost of living comparison.

Housing Costs in Tennessee

Housing is where Tennessee delivers the most dramatic variation between cities. The statewide median home price is approximately $449,000, right around the national median. But that number is heavily skewed by Nashville’s market. Outside of the Nashville metro, home prices drop significantly — Memphis has a median of just $185,000, one of the lowest among major U.S. metros. Average statewide rent for a two-bedroom apartment is about $1,200 per month, compared to roughly $1,350 nationally. The housing index for Tennessee overall sits at 79.6, reflecting that once you look beyond Nashville, housing is remarkably affordable.

Nashville commands the highest prices in the state and has become one of the fastest-growing housing markets in the Southeast. The median home price in the Nashville metro sits near $485,000, driven by the city’s explosive population growth, a thriving job market in healthcare and entertainment, and a wave of corporate relocations. Average two-bedroom rents in Nashville run about $2,013 per month. A household typically needs around $120,000 in annual income to comfortably afford a median-priced Nashville home. However, Nashville’s suburbs — including Murfreesboro, Hendersonville, and Mt. Juliet — offer more affordable options while remaining within commuting distance. If you are coming from California or New York, even Nashville will feel like a bargain — and cities like Memphis or Knoxville will feel like a steal.

Memphis is the affordability champion of the state. With a median home price around $185,000 and two-bedroom rents averaging $1,308 per month, Memphis offers some of the lowest housing costs among major U.S. cities. The city has seen home values increase by roughly 15% over the past year, suggesting the market is heating up, but prices remain well below national norms. The low entry point makes Memphis particularly attractive for first-time homebuyers and investors.

Knoxville sits in between, with a median home price of $314,000 and two-bedroom rents around $1,490. The University of Tennessee and the nearby Great Smoky Mountains National Park drive steady demand, but the market has remained relatively affordable compared to similarly sized college towns. Chattanooga, with a median home price of $350,000 and rents around $1,666, represents a solid middle ground — more expensive than Memphis and Knoxville but considerably cheaper than Nashville.

Groceries & Dining

Grocery costs in Tennessee are approximately 5% below the national average, making the state one of the more affordable places to feed a household. A single person can budget around $330 to $400 per month for groceries depending on location, while a family of four typically spends about $1,015 per month on food at home. Nashville, with its food scene drawing national attention, has grocery costs closer to the national average, while Memphis and Knoxville are noticeably cheaper.

Dining out in Nashville has become a nationally recognized experience, with hot chicken, barbecue, and Southern fine dining drawing food tourists year-round. A mid-range restaurant meal for two in Nashville averages $65 to $90. The same meal in Memphis — famous for its own barbecue and soul food traditions — runs $45 to $70. Knoxville and Chattanooga offer meals for two at $40 to $65. Nashville’s dining scene is a genuine lifestyle draw, but you will pay a modest premium for it compared to the rest of the state.

One important consideration: Tennessee has a 7% state sales tax — one of the highest in the country. However, the state taxes groceries at a reduced rate of 4% (down from the full 7% on other purchases). When combined with local sales taxes, grocery purchases are typically taxed at 4% to 6.75% depending on the jurisdiction. This is higher than the many states that fully exempt groceries from sales tax, adding roughly $40 to $70 per month to a family’s food budget.

Utilities & Energy Costs

Utility costs in Tennessee are about 4% below the national average, thanks in part to the Tennessee Valley Authority (TVA), which provides some of the most affordable electricity in the Southeast. A typical monthly utilities breakdown includes electricity ($135 to $155), natural gas ($20 to $45 depending on season), water and sewer ($35 to $60), and internet ($50 to $75). Total monthly utility costs average about $310 per month for a standard two-bedroom apartment, compared to roughly $300 nationally.

Tennessee’s climate means you will use both heating and cooling throughout the year. Summers are hot and humid, with temperatures regularly exceeding 90°F from June through September, especially in Memphis and Nashville. Air conditioning runs heavily during these months, pushing electricity bills to their annual peaks — approximately $145 to $180 during July and August. Winters are mild to moderate. West Tennessee (Memphis) sees milder winters, while East Tennessee (Knoxville, Chattanooga) can experience colder temperatures and occasional snow, which pushes heating costs up from December through February.

Natural gas costs in Tennessee are favorable, averaging about $10.31 per thousand cubic feet compared to the national average of $12.92. The TVA’s mix of hydroelectric, nuclear, and natural gas generation keeps electricity rates competitive. Internet service is widely available in urban areas, and Chattanooga is particularly notable for its municipally owned EPB Fiber Optics network, which offers some of the fastest and most affordable internet in the country — a significant draw for remote workers.

Healthcare Costs

Healthcare costs in Tennessee are approximately 8% below the national average, making it one of the more affordable states for medical care. Nashville is sometimes called the “Healthcare Capital of America” — the city is home to HCA Healthcare (the largest for-profit hospital operator in the country), Community Health Systems, and dozens of other healthcare companies. A single person can expect to budget approximately $460 per month for healthcare including insurance premiums, copays, and out-of-pocket expenses.

Health insurance premiums on the ACA marketplace in Tennessee average about $500 to $580 per month for a 40-year-old nonsmoker before subsidies, which is below the national average. Employer-sponsored plans are widely available through the state’s healthcare, manufacturing, and logistics sectors. Vanderbilt University Medical Center in Nashville is one of the top-ranked hospitals in the Southeast, and the UT Medical Center in Knoxville, CHI Memorial in Chattanooga, and Methodist Le Bonheur in Memphis all provide comprehensive regional care.

Rural areas of Tennessee — particularly parts of West and Middle Tennessee outside the major metros — have more limited healthcare access. Hospital closures in rural communities have been an ongoing concern, so if you are considering a location outside the major cities, healthcare infrastructure is worth investigating thoroughly. For retirees evaluating healthcare alongside affordability, see our best states to retire in 2026 guide.

Transportation Costs

Transportation costs in Tennessee are about 9% below the national average. Gas prices in the state are consistently among the lowest in the country — Tennessee has a fuel tax of $0.27 per gallon, below the national average of $0.39. Average gas prices in the state typically run $0.15 to $0.25 less per gallon than the national average.

Tennessee is a car-dependent state. Public transit is minimal in most cities — Nashville has WeGo Public Transit (buses), Memphis has MATA (buses and a limited trolley line), and Chattanooga has CARTA (buses and a free downtown electric shuttle), but none of these systems provide comprehensive coverage. Most residents rely on personal vehicles for commuting. Average commute times are moderate: about 27 minutes in Nashville, 24 in Memphis, 22 in Knoxville, and 21 in Chattanooga.

Monthly transportation costs for a single person — including car payment, insurance, gas, and maintenance — average about $335 per month, compared to $370 nationally. Car insurance in Tennessee averages approximately $1,700 to $2,000 per year for full coverage, which is slightly below the national average. The lower gas prices and relatively short commute distances are the primary savings drivers.

Tennessee’s No-Income-Tax Advantage

Tennessee’s single biggest financial draw is its zero state income tax. The state fully repealed its Hall Income Tax in 2021, which had previously taxed interest and dividends. Today, 100% of your wages, salaries, investment income, retirement distributions, and Social Security benefits are free from state income tax. For someone earning $100,000 per year, that’s an immediate savings of $5,000 to $13,300 compared to states like California (top rate 13.3%) or New York (top rate 10.9%). Tennessee is one of nine states with no income tax — see our complete guide to no-income-tax states in 2026 for a full comparison.

The trade-off for zero income tax is a 7% state sales tax — one of the highest in the nation. Local jurisdictions add an additional 1.5% to 2.75%, bringing the combined sales tax rate to 8.5% to 9.75% in most areas. Groceries are taxed at a reduced 4% state rate, but the local add-on still applies. This means everyday purchases cost more than in states with lower sales taxes. The effective property tax rate averages about 0.56% statewide — roughly half the national average of 0.99%.

For higher earners and retirees, the math strongly favors Tennessee. A household earning $150,000 in California would pay roughly $9,000 to $12,000 in state income tax; in Tennessee, that amount is $0. The higher sales tax erodes some of the savings for everyday spending, but for most income levels, the income tax elimination more than compensates. Use our Paycheck Calculator to see exactly how much more you would take home in Tennessee.

Tennessee vs. Neighboring & Popular States

How does Tennessee compare to other states that relocators commonly consider? The following table puts Tennessee side by side with neighboring and high-demand destinations. For a full 50-state breakdown, see our cost of living by state guide.

Tennessee’s overall cost of living index of 89 is lower than Georgia (91), Texas (93), North Carolina (96), and significantly lower than Florida (102). The no-income-tax advantage puts Tennessee on equal footing with Texas and Florida, but with a lower baseline cost of living. The primary trade-off is Tennessee’s higher sales tax rate. Georgia and North Carolina have income taxes but lower sales taxes, so the optimal choice depends on your income level and spending patterns. For a detailed state ranking, see our cheapest states to live in guide.

City-by-City: Where to Live in Tennessee

Nashville: Music City’s Boom Comes at a Price

Nashville is Tennessee’s most expensive city, with a cost of living index of approximately 103 — slightly above the national average. The median home price in the Nashville metro sits near $485,000, and average apartment rents are around $1,825 per month. The city has experienced remarkable growth over the past decade, with Amazon, Oracle, and AllianceBernstein establishing major operations alongside the city’s established healthcare and music industry giants. A household often needs around $120,000 annually to comfortably afford a median-priced Nashville home.

The Nashville metro’s suburbs offer meaningful savings. Murfreesboro (30 miles southeast) has median home prices around $380,000 with two-bedroom rents averaging $1,400. Hendersonville and Mt. Juliet offer similar suburban value with commute times of 25 to 40 minutes to downtown. For those set on Music City, these suburbs provide Nashville access at a 15% to 25% discount on housing costs.

Memphis: Deep Affordability in the Bluff City

Memphis offers the most affordable major-city living in Tennessee. The cost of living index around 90 is about 10% below the national average, and housing costs are the standout savings. Median home prices hover near $185,000 — well under half of Nashville’s median. Two-bedroom rents average about $1,308 per month. Memphis is home to FedEx’s global headquarters, St. Jude Children’s Research Hospital, and AutoZone, providing a solid base of major employers.

Memphis has a rich cultural identity — from Beale Street blues to world-famous barbecue — and the city has been investing heavily in downtown revitalization. The city does face challenges with higher crime rates in certain neighborhoods, so research at the neighborhood level is essential. For anyone whose top priority is maximizing purchasing power, Memphis offers exceptional value that is hard to find in other major U.S. cities.

Knoxville: Affordable Gateway to the Smokies

Knoxville has the lowest cost of living among Tennessee’s major cities, with an index of approximately 86 — about 14% below the national average. Median home prices sit around $314,000 with two-bedroom rents averaging $1,490. The University of Tennessee is the city’s economic anchor, alongside Oak Ridge National Laboratory (about 25 miles west), a growing healthcare sector, and a developing tech scene.

Knoxville’s proximity to the Great Smoky Mountains National Park — the most visited national park in the country — is a major lifestyle draw. Hiking, fishing, and outdoor recreation are within a 30- to 60-minute drive. The city’s Old City and Market Square districts have been revitalized with restaurants, breweries, and cultural venues. Knoxville appeals particularly to outdoor enthusiasts, retirees, and families who want a moderate-sized city with a low cost of living and strong natural surroundings.

Chattanooga: The Scenic City on the Rise

Chattanooga has emerged as one of Tennessee’s most compelling cities for relocators, with a cost of living index around 89. The median home price sits at approximately $350,000 with two-bedroom rents around $1,666. What sets Chattanooga apart is its combination of natural beauty (Lookout Mountain, the Tennessee River, rock climbing at world- class crags), a growing tech sector, and what many consider the best municipal internet service in the country through EPB Fiber Optics.

Chattanooga’s economy has diversified significantly, with Volkswagen’s North American manufacturing plant, Amazon distribution centers, and a thriving startup community in the Innovation District. The city’s healthcare sector is anchored by CHI Memorial and Erlanger Health System. For remote workers, Chattanooga’s gigabit internet, affordable housing, and outdoor lifestyle make it an increasingly popular choice. See our best states for remote workers guide for more options.

Monthly Cost Breakdown: Tennessee vs. National Average

The following table summarizes what a single person can expect to spend per month in Tennessee compared to the national average. These are statewide averages — your actual costs will vary based on which city you choose and your personal spending patterns.

Tennessee’s total monthly costs for a single person come in about $335 below the national average, with the largest savings coming from lower housing and transportation costs. When you add the income tax savings — which do not appear in this expense table — the real financial advantage grows substantially. A person earning $75,000 in Tennessee keeps roughly $3,000 to $7,500 more per year than in states with income taxes, on top of the monthly expense savings. Use our Cost of Living Calculator to compare specific cities side by side.

Best Tennessee Cities by Budget and Lifestyle

Tennessee offers something for nearly every budget and lifestyle preference. Here is how to match your priorities to the right city:

• Maximum affordability — Memphis and Johnson City offer the lowest overall costs. Memphis gives you big-city amenities and a major airport at small-town prices. Johnson City in the Tri-Cities region is ideal for retirees and outdoor lovers on a tight budget.
• Best overall value — Knoxville and Chattanooga balance affordability with quality of life, outdoor access, and growing job markets. Both are favorites for remote workers and families. See our most affordable cities in America rankings for national comparisons.
• Career growth and urban energy — Nashville is the clear choice for ambitious professionals, particularly in healthcare, music and entertainment, tech, and finance. You will pay more, but salaries are also higher, and the no-income-tax advantage amplifies your earnings compared to competing metros like Austin or Charlotte.
• Military families — Clarksville, adjacent to Fort Campbell (one of the largest Army installations in the country), offers affordable housing, strong schools, and a community built around military life. With a cost of living index around 85, it is one of the cheapest places to live near a major military base.
• Retirees — Tennessee’s zero income tax means Social Security, pensions, and 401(k) withdrawals are all untaxed at the state level. Knoxville, Chattanooga, and the Tri-Cities area offer affordable living with access to the Appalachian Mountains and a mild four-season climate. See our best states to retire guide for a national comparison.

How Much Does It Cost to Move to Tennessee?

The one-time cost of an interstate move to Tennessee depends on distance, volume of belongings, and whether you hire full-service movers. A long-distance move from the Northeast (e.g., New York to Nashville) typically runs $4,500 to $8,500 for a full-service mover handling a three-bedroom household. A shorter move from a neighboring state like Georgia, North Carolina, or Alabama usually costs $1,500 to $3,500.

DIY options like renting a truck or using portable storage containers can reduce costs by 30% to 50%. For a detailed estimate based on your specific situation, try our Moving Cost Estimator. If you are wondering about tax deductions for your move, check our guide to moving expense deductions in 2026. And for planning your full relocation budget, our relocation budget guide walks through a three-layer approach that covers one-time costs, monthly adjustments, and tax impacts.