Housing market snapshot: Tennessee
Nashville's premium pricing contrasts with more approachable markets in Knoxville, Chattanooga, Memphis, and smaller cities. No state income tax on wages influences some relocation decisions. With an indicative median near $360,000, Tennessee sits in the middle of the national price distribution. Small rate changes move the payment more than many first-time buyers expect.
Property taxes and homestead notes
Tennessee's average effective property tax rate of roughly 0.56% sits below the national midpoint, so taxes often take a smaller slice of PITI than in high-tax states — though your county can still differ. Property tax rates are relatively moderate. County and city rates differ - Davidson County buyers should pull parcel-level estimates.
Homeowners insurance in Tennessee
Indicative average homeowners insurance around $1,700/year is in a typical U.S. band. Roof age, claims history, and deductibles still swing real quotes. Severe storms and tornado risk affect premiums. Flood risk along rivers should be reviewed.
Worked payment example
Using Tennessee's indicative median of $360,000, a 20% down payment of $72,000, a 6.75% rate, and local tax/insurance defaults, principal and interest is about $1,868 with a full monthly payment near $2,178 (including roughly $168 tax and $142 insurance). With only 5% down ($18,000), the same price point jumps to about $2,685 per month because the loan is larger and PMI is typically required — roughly $157 of that total.
A common comfort check is keeping total housing cost near 28% of gross income. At $2,178/month, that implies ballpark gross income around $93,327 per year before other debts. Run your real income and debts through our home affordability calculator rather than relying on this rule of thumb alone.
Adjust the calculator above, or open the home affordability calculator with your income and debts. Methodology details are on how we calculate.
Buyer programs to research in Tennessee
- Tennessee Housing Development Agency (THDA) programs
- Great Choice and related THDA products
- Local Metro Nashville assistance overlays
Eligibility, funding, and income limits change. Confirm details with the program administrator or a participating lender before relying on assistance in your offer.
Practical tips for Tennessee buyers
- Nashville HOA and infill premiums need separate stress tests.
- Compare surrounding counties for tax and commute tradeoffs.
- Confirm flood history on older neighborhoods near creeks.
Figures on this page are educational estimates for Tennessee, not a lender quote. County tax assessors, insurance agents, and licensed mortgage professionals can confirm the numbers for a specific address. See our methodology page for the formulas and assumptions behind every estimate.