Did you know that Tennessee has the 6th lowest cost of living in the nation and doesn’t have a state income tax? Whether you’re considering moving to Tennessee or trying to decide if you’d like to stay put, to help make your decisions, it’s beneficial to learn more about the average cost of living in the Volunteer State. Factors like housing prices, transportation costs, bills and utilities, health and medical expenses, as well as food and shopping, are all expenses you’ll incur while living in the Tennessee area. Below we’ll break down the average cost of living in Tennessee to help you learn more about how much it would truly cost to reside in this state.
Real Estate Market in Tennessee
If you’re thinking about moving to the area or you’d like to find out if now would be a good time to sell your current home, learning more about the real estate market can help you make your decision.
The Tennessee real estate market has been on fire, and several markets have seen home values increase like crazy. The average house selling price in Tennessee is $320,000, which has seen an increase of 18.6% year over year.
To give you an idea of what cities have seen a considerable change, below are the three top cities that have seen the best real estate market trends in Tennessee.
- Knoxville- Specifically, in the Knoxville market, the average house selling price is $295,000 which saw a 19% increase year over year.
- Nashville –Nashville on the other hand, comes in at $398,000 for the average house selling price, which is a 21.7% increase since last year.
- Chattanooga –Chattanooga’s average house price is $279k, which is a year of year increase of 21.4%.
Given that home prices are on the rise, this is a great time to consider selling your house in Tennessee to profit from the increase in home values. These markets are currently experiencing a low inventory of available homes but an increased amount of people looking to buy. So if you’re trying to figure out if now is the time to sell your house in Knoxville, Chattanooga, or Nashville, conditions are good to sell your property successfully.
However, factors like the location of your home, age, condition, and size can make a difference. But the good news is that you can always sell your house to a “we buy houses Tennessee” company if you have any difficulty finding a buyer.
If you plan to move to any of these three cities or their suburbs, just be prepared to pay top dollar for real estate. Since inventory is low and there are more buyers than there are houses for sale, which means sellers will get multiple offers. Just be prepared to make decisions quickly and to get a loan pre-approval so that way you can make a competitive offer.
Related Article: How To Sell Your Home for the Right Price This Summer in Knoxville
Average Costs of Living in Tennessee
According to Best Places, based on a scale of 100 ( below 100 meaning cheaper than the US average and above 100 meaning more expensive), the overall cost of living in Tennessee ranks 87.6.
But what about other living expenses in Tennessee? Where do they rank compared to the rest of the U.S.? Below we break down what you should expect to spend while residing in Tennessee.
Bills and Utility Costs
In 2019 the U.S. Energy Information Administration (EIA) found that the average monthly energy bill costs Tennesseans $132.33. That’s $16.84 above the U.S. average energy utility bill of $115.49. This amount only includes electricity, heating, cooling, water, and garbage.
Other bills such as the internet is an additional cost to consider. For example, the average monthly fee for 60 Mbps of internet or more, unlimited data, or cable/ADSL in these major cities are roughly:
- Nashville: $70.29
- Knoxville: $66.35
- Chattanooga: $64.33
Another monthly bill to keep in mind is your cell phone bill, which costs on average $94 in Tennessee. That’s $19 dollars less than the average cost of cell phone plans in the U.S., costing $113.
Transportation can also be a significant component of the cost of living. For example, in Tennessee, 92.3% of commuters drive to work, compared to 85.5% of commuters nationwide. On average, a Tennessee motorist will drive 12,261 miles a year. If you were to take into account the average fuel economy and the average cost of gas. In which case, regular fuel costs an average of $2.88 a gallon in Tennessee as of summer 2021 – the average motorist can expect to spend $1,400 on gas alone in one year (that’s with a fuel economy of 25 miles per gallon).
Other transportation to take into consideration includes car insurance premiums, which can vary by state. In Tennessee, the average car insurance premium is $1,206, making it less than the $1,592 national average. According to data from the EPI, the average single adult in the state spends $10,142 on transportation.
If you were to take public transportation, here is an idea of what that would cost in these major cities in Tennessee:
- Knoxville $540
- Chattanooga $600
- Nashville $780
Housing Prices in Tennessee
The median home value in Tennessee is $193,409, according to NeighborhoodScout. However, that is $101,891 less than the national median home value of $295,300.
Across the state, the median price of a home built in 1939 or earlier is $136,100, while the median value of a house built in 2014 or later is $300,000.
Housing prices in Tennessee for renters are more affordable than the national average. The typical renter in Tennessee spends about $841 a month on housing, which is $182 less than the $1,023 national median monthly rent.
For example, monthly rent for a one-bedroom in the state averages $686, while the typical rent for a unit with five or more bedrooms can cost $1,239. Of course, the cost of the monthly rate can vary between cities and locations.
Tennessee comes in at the 25th highest renter rate of any state. However, 33.7% of occupied houses are rented across the state, which is less than the national average of 36.2%.
Related Article: 5 Improvements That Boost Home Value Before Selling
Food & Shopping
Food is another everyday expense that significantly impacts the overall cost of living in an area. For example, in Tennessee, the average single adult spends an average of $3,214 on food annually or roughly $267 per month. A family of four spends $9,305 on average, which equates to $775 per month.
The nationwide average annual food cost is roughly $3,240 for a single adult and $9,354 for a family of four. Keep in mind, these figures are estimated by foods that were picked up at the local grocery store and have been entirely prepared in the home. So if cooking isn’t quite your thing, you’ll also want to budget for other additional food costs.
Something else to plan for when shopping for food or shopping, in general, is state sales tax. Tennessee is known for having the highest average sales tax, ranging from 8.5% to 9.75%, depending on the county in which you’re shopping. Although the base state sales tax is 7%, counties impose extra rates that range from 1.5% to 2.75%.
Health and Medical Costs
When it comes to health and medical costs, your out-of-pocket costs and health insurance premiums – assuming at least a basic level of health insurance coverage- are relatively high in Tennessee.
Average healthcare costs for a single adult in the state total $4,925 per year, compared to the national average of $4,266. For a family of four, the average annual health care costs $14,855, which is $1,905 more than the comparable national average of $12,950.
In Tennessee, for a family of four to have health insurance coverage costs $14,855 annually, which is $1,905 more than the national average of $12,950.
Is It Expensive to Live in Tennessee?
In short, no, the state of Tennessee is actually a very affordable place to live. According to the 2021 Cost of Living Index, Tennessee ranks sixth place for the lowest cost of living in the U.S.
Nevertheless, like any state, cost-of-living expenses will vary across the state. While typical expenses in small towns and rural areas are very inexpensive, living costs tend to be considerably higher in popular urban centers like Nashville, Knoxville, or Chattanooga.
Tennessee is a great place to live, work, raise a family, or retire. If you’re interested in moving to TN, working with a real estate professional who knows the area would be helpful.
If you’re a current resident of Tennessee and are interested in selling your home to either stay in the area or move out of state, now is the perfect time to sell.
However, if you’re facing some obstacles getting your house ready to sell, such as dealing with major repairs, cleaning out your garage, a foundation issue, or a mold problem- selling your home as-is, is an option.
One of the top companies that buy houses in Nashville would be happy to help- Nexus Homebuyers! Based out of Knoxville, TN, Nexus has been able to help many homeowners successfully sell their homes in any condition, with any obstacles and/or challenges. So if you’d like to “sell my house fast in Knoxville,” Chattanooga, or Nashville, contact Nexus Homebuyers today to receive a cash offer for your Tennessee home.