Cost of Living in Tennessee: How It Compares With the U.S. in 2026

Quick answer (as of November 2026) Tennessee costs less than the U.S. average on most lines of a budget. The Bureau of Economic Analysis puts the state's 2024 price level at 91.9, with the U.S. at 100, and housing and utilities account for most of the gap. Tennessee doesn't tax wages, residential property is taxed on 25 percent of its appraised value, and electricity averaged 13.42 cents per kilowatt-hour in August 2026 against 18.16 cents nationally. The trade-off is sales tax: 7 percent state plus up to 2.75 percent local, and groceries are taxed too. Middle Tennessee runs above the state average, especially on housing.

Send me the moving guide

Somebody told you Tennessee is cheap. Then you priced a house around Nashville and the numbers didn't look cheap at all. Both are true, and which one applies to you depends on where in the state you land and what you spend money on.

I moved my family here from California, and I live in Canterbury in Thompson's Station. Here's what living in Tennessee actually costs, line by line, against the U.S. average, using the government's own numbers. If you're planning a move and want help running yours, DM me, text or call 615-392-1186.

What is the cost of living in Tennessee compared with the U.S.?

Tennessee's overall price level was 91.9 in 2024, with the U.S. at 100, according to the Bureau of Economic Analysis (BEA). That's about 8 percent below the national level. BEA published those 2024 figures on February 19, 2026, and its 2025 figures are due December 10, 2026.

Here's each line of a budget, Tennessee against the U.S., as of November 2026.

Property tax figures are the county and city rates published for the year shown and are for planning only. Your actual bill depends on the assessed value, any exemptions and the city or district the home sits in. Confirm with the county assessor or trustee and your tax professional before you rely on a number.

BEA's index compares price levels in one year, so 91.9 means the same basket cost about 8 percent less in Tennessee than the national average in 2024. It doesn't tell you what your own bills will be. The rest of this page goes line by line.

How much does housing cost in Tennessee?

Housing is the biggest reason Tennessee runs below the national average. BEA's 2024 housing price level for Tennessee is 79.1, against 100.6 for the U.S., and BEA says housing rents are often the main driver of the differences between states.

Zillow's Home Value Index for Tennessee was $330,844 in September 2026, up 0.6 percent from a year earlier. The U.S. index was $366,157, so a typical Tennessee home sat about 10 percent below the national figure.

Census numbers come in lower because they're survey answers from 2020 to 2024, not today's prices. The Census Bureau puts Tennessee's median home value at $286,700 against $332,700 for the U.S., and median gross rent at $1,189 a month against $1,413. Median monthly owner costs with a mortgage are $1,566 in Tennessee and $1,963 nationally.

Housing in the Nashville metro costs more than the U.S. average, and the Middle Tennessee section below has those numbers.

Does Tennessee have a state income tax?

No. Tennessee has no state income tax on earned income, so there's no state withholding from your paycheck, according to the Tennessee Department of Revenue. The Hall income tax on interest and dividends was repealed January 1, 2021.

You still pay federal income tax like everywhere else. What changes is the state line on your pay stub, which goes away once you're a Tennessee resident. My guide to becoming a Tennessee resident covers the license, car and voter deadlines that come with the move.

What is the sales tax in Tennessee?

Tennessee's state sales tax is 7 percent on most goods and taxable services, and every county and city adds a local rate of up to 2.75 percent, per the Tennessee Department of Revenue. The state's rate file for the fourth quarter of 2026 lists county rates from 2 percent to 2.75 percent, so most purchases carry 9 to 9.75 percent in total.

Williamson, Maury and Rutherford counties are all at the 2.75 percent cap, so you'll pay 9.75 percent in Franklin, Thompson's Station, Spring Hill, College Grove and Murfreesboro. Davidson County is at 2.25 percent plus a 0.5 percent transit surcharge, which also comes to 9.75 percent in Nashville.

So the tax follows your spending. A $1,000 purchase carries $97.50 in sales tax at 9.75 percent.

Are groceries taxed in Tennessee?

Yes. Groceries are taxed at a 4 percent state rate plus the local rate, according to the Tennessee Department of Revenue. In Williamson, Maury and Rutherford counties that's 6.75 percent.

Davidson County cut its local rate on food and food ingredients to 1.75 percent on November 1, 2026, per Revenue Notice 26-19. With the 4 percent state rate and the transit surcharge, groceries in Nashville come to 6.25 percent. The reduced rate doesn't cover candy, alcohol, tobacco, dietary supplements or prepared food. My Nashville cost of living guide goes through what that saves on a grocery bill.

How much are property taxes in Tennessee?

Property tax in Tennessee is figured on 25 percent of a home's appraised value. The county assessor sets the appraised value, and the county commission and any city set the rates, according to the Tennessee Comptroller. The Comptroller's example: a $400,000 home is assessed at $100,000, and at $2.50 per $100 of assessed value the tax is $2,500 a year.

Because only a quarter of the value is taxed, a rate of $2.00 per $100 works out to 0.5 percent of the appraised value a year. Here's the same $400,000 home on the current rates in four Middle Tennessee counties, as of November 2026.

Rates come from the Williamson County Trustee for 2026, Maury County Resolution 07-26-29 for the year beginning July 1, 2026 plus the City of Spring Hill's $0.739, Rutherford County for 2026, and the Davidson County Assessor. The $400,000 value is the Comptroller's example, not a median, and the appraised value can differ from the price you pay.

Property tax figures are the county and city rates published for the year shown and are for planning only. Your actual bill depends on the assessed value, any exemptions and the city or district the home sits in. Confirm with the county assessor or trustee and your tax professional before you rely on a number.

A ZIP code won't tell you which line you're on, and Spring Hill sits in two counties. I check the county and city limits on every address before you write an offer. My Williamson County property tax guide has every city line in that county, and my Spring Hill property tax guide shows both sides of the county line.

How much are utilities in Tennessee?

Utilities are one of the cheapest lines in a Tennessee budget. BEA's 2024 utilities price level for Tennessee is 72.1, against 98.4 for the U.S.

Electricity is the biggest piece. Residential customers in Tennessee paid an average of 13.42 cents per kilowatt-hour in August 2026, against 18.16 cents for the U.S., according to the U.S. Energy Information Administration (EIA). That's about 26 percent less, and it was up from 13.09 cents in August 2025. At those averages, 1,000 kilowatt-hours costs about $134 in Tennessee and about $182 nationally.

Your rate comes from your local power company, and water, sewer and trash are set town by town. The city guides for Franklin, Spring Hill and Nashville list the actual utility companies and their rates.

How much is gas in Tennessee?

Regular gasoline averaged $3.68 a gallon in Tennessee on November 5, 2026, against $4.10 nationally, according to AAA. That's about 10 percent less. A year earlier, Tennessee's average was $2.62.

Prices vary by metro. On the same day, AAA had Chattanooga at $3.47, Nashville at $3.65 and Memphis at $3.83. BEA's 2024 goods price level for Tennessee, which includes gas and groceries, is 96.2 against 99.6 for the U.S.

Is Middle Tennessee more expensive than the rest of the state?

Yes. The Nashville metro, which takes in Davidson, Williamson, Maury and Rutherford counties among others, had the highest price level of Tennessee's ten metro areas in 2024, at 96.3, per BEA. Its housing price level was 104.6, higher than the U.S. and well above every other Tennessee metro.

Home values tell the same story. Zillow's index for the Nashville metro was $448,896 in September 2026, about 36 percent above the Tennessee index, though it was down 0.5 percent from a year earlier. Around Franklin, Zillow's index for the 37064 ZIP code was $901,467.

The tax structure is the same everywhere in the state: no tax on wages, the 7 percent state sales tax and the 25 percent assessment. Utilities are cheap everywhere, with every Tennessee metro between 71.9 and 75.9 on BEA's utilities scale. In Middle Tennessee, you're mostly paying more for the house, and the county and city you pick set your property tax.

How do you estimate your own Tennessee budget?

Start with housing, because it's the line that moves the most between towns. Then add the lines Tennessee taxes and the ones it doesn't. Here's how I'd build it:

1. Housing. Price the town and county you're looking at. The Census statewide median rent of $1,189 is a 2020 to 2024 survey figure, so check current asking rents where you want to live.
2. Property tax. Take the appraised value, multiply by 25 percent, divide by 100 and multiply by the rate for that address. On a $500,000 home in Thompson's Station at $1.403, that's $1,753.75 a year.
3. Income tax. Take the state income tax line off your current budget. Federal tax stays the same.
4. Sales tax. Add 9 to 9.75 percent to what you spend on taxable goods and services, and 6.25 to 6.75 percent on groceries in the counties above.
5. Utilities. Look at the kilowatt-hours on a recent electric bill and multiply by the local rate, or use the 13.42-cent state average for a first pass.
6. Gas. Multiply your monthly gallons by the AAA average for the metro you're moving to.

If you're coming from California, my California equity calculator shows what your sale could buy here, and the buyer closing cost calculator covers the cash you'll need at closing. Still deciding whether to rent first? Read rent or buy in Middle Tennessee.

Weighing a move to Tennessee?

I'll run these numbers on the actual addresses you're looking at, including the county, the city limits and the tax line each home sits on. Can't get here to tour? I record a video walkthrough of the house and send you an unlisted YouTube link, so you can rewatch it as many times as you need.

My family and I love living here and wouldn't change it. For the bigger picture, read moving to Tennessee, is Tennessee a good place to live and how I work with buyers moving in from out of state. Tell me where you're moving from and when. DM me, text or call 615-392-1186.

Frequently asked questions

Is Tennessee cheaper to live in than the U.S. average?

Yes. Tennessee's overall price level was 91.9 in 2024, with the U.S. at 100, according to the Bureau of Economic Analysis. That's about 8 percent below the national level.

Does Tennessee have a state income tax?

No. Tennessee has no state income tax on earned income, so there's no state withholding from your paycheck, according to the Tennessee Department of Revenue. The Hall income tax on interest and dividends was repealed January 1, 2021.

What is the sales tax in Tennessee?

Tennessee's state sales tax is 7 percent on most goods and taxable services, and every county and city adds a local rate of up to 2.75 percent, per the Tennessee Department of Revenue. The state's rate file for the fourth quarter of 2026 lists county rates from 2 percent to 2.75 percent, so most purchases carry 9 to 9.75 percent in total.

How much are property taxes in Tennessee?

Property tax in Tennessee is figured on 25 percent of a home's appraised value. The county assessor sets the appraised value, and the county commission and any city set the rates, according to the Tennessee Comptroller. The Comptroller's example: a $400,000 home is assessed at $100,000, and at $2.50 per $100 of assessed value the tax is $2,500 a year.

What is the average electric bill in Tennessee?

Residential customers in Tennessee paid an average of 13.42 cents per kilowatt-hour in August 2026, against 18.16 cents for the U.S., according to the U.S. Energy Information Administration. At those averages, 1,000 kilowatt-hours costs about $134 in Tennessee and about $182 nationally.

What city in Tennessee has the lowest cost of living?

Among Tennessee's ten metro areas, Jackson had the lowest price level in 2024, at 85.5, per the Bureau of Economic Analysis. The Nashville metro had the highest, at 96.3. For a city-by-city ranking on home values, rent and property tax, see the cheapest places to live in Tennessee.