15 Cheapest Places to Live in Tennessee

Property price and the cost of living play a critical role in any American’s decision to move. Property price is the main factor for citizens who can choose a location (because they’re retired, unattached, or are working from home).

You’ll be surprised by the disparity in housing prices between cities. The median price of a property in Nashville, for example, is $298,000, while in Chattanooga, it’s $150,000. While both towns are in Tennessee State, their location accounts for the vast difference in property prices.

Even so, Tennessee State is ranked among the most affordable places to live in the country. According to the 2021 cost of Living Index, the state ranks sixth for the low cost of living.

Homeowners who moved recently cited reasonable property prices, low cost of living, and low tax burden as the primary reasons for moving to the state. The next part of the article explains why it’s more affordable to live in the state and the cheapest places to live in Tennessee.

Key Takeaways

  • Tennessee has a median home value of $ 231,600, which is less than the national average. The cost of rent is also pretty low but varies by city
  • Food prices vary by city/town, but a single adult is likely to spend $2990 on food. In Memphis, a dozen eggs cost $2.48, while in Chattanooga, a similar pack costs $1.92
  • The cost of healthcare in Tennessee is slightly above the nation’s average, but it depends on the cover and the medical plan
  • Tennessee became the eighth state to eliminate state income tax. As such, business people only pay sales tax of 7%, but some towns may charge an additional levy of 1.5-2.75%
  • Utility costs in Tennessee are 4-5% lower than the nation’s average, thanks to the state’s power generation efforts

Is Tennessee Affordable?

An aerial skyline view of Nashville. A calm river is in the foreground, large buildings in the back. It is almost dark so lights are on

The stats show the state is among the most affordable places to live in the United States. But, if you’re wondering what city in Tennessee has the lowest cost of living, check out this list of the 15 cheapest places to live. We’ve ranked them based on the cost of living index:

Note: The national average cost of living index is 100. As such, a city with an index above 100 has a high cost of living.

1.  Humboldt: Most Affordable Housing

Average rent: $399

Average home price: $72,300

Humboldt isn’t as popular as other cities in Tennessee, but it sure does have a low cost of living index (73.3). Groceries, housing, and transportation expenses are also very affordable because they have indices below 100.

Housing is particularly cheap as the median price of a home in the town is $72,300 compared to the state’s $231,600. Since the housing market isn’t as active as in other cities in Tennessee, so you’re bound to get a pretty good deal on a property.

2.  La Follette: Has a Tight-knit Community

Average rent: $914

Average home price: $95,000

With an overall cost of living index of 76.3%, La Follette is one of the most affordable places to live in the state. When compared to Tennessee alone, it’s 11.7% lower. The other cost of living indices (groceries, transportation, utilities, health, and housing) are also below the national average.

The housing index is the least (37.8), allowing residents to buy and rent homes easily.

The median income of households in La Follett is pretty low, but with such affordable housing, both renters and homeowners can live a comfortable life.

The town has a relatively small population of 7,000 people, and its location (in Campbell County) creates a tight-knit community feel.

3.  Paris: Best for Retirees

Average rent: $435

Average home price: $123,000

Tennessee also has Paris and an Eiffel Tower. It’s not as long as the real Eiffel Tower, but this 70-foot is an excellent spot for taking spectacular photos.

Apart from the stunning tower, Paris is also a pretty affordable city in TN. Its cost of living is 23.7% less than the nation’s average and has maintained a consistent population of 10,000. The small town is located northwest of Tennessee, just 15 miles from the famous Land Between, the Lakes.

Paris has a compelling history, too, as most local houses and commercial buildings are listed on the US National Register of Historic Places.

John Wesley Crockett, a former US Representative of Tennessee’s 12th Congressional District, was buried in the Paris city cemetery, and some Crockett descendants still live here.

The city also has a fair share of outdoor activities. The Paris Landing State Park has a vast camping area, and if you love exploring the waters, rent a boat and set sail to Kentucky Lake. The park has some hiking trails too.

Related: Best Mobile Home Communities in Tennessee

4.  Rockwood: Has the Smallest Population

Average rent: $ 737

Average home price: $136,500

Rockwood was an old mining town established after a Union Officer found iron on Walden Ridge. Roane Iron Company employees settled in the city, and it has since grown to a population of 5,500 people.

The town’s economy has also grown, offering natives and new residents many opportunities. The cost of living is pretty low (78%) compared to the national average, and housing has the lowest index (43.4), making it attractive to residents looking for affordable housing in Tennessee.

Related: Pros and Cons of Chattanooga, Tennessee

5.  Lexington: Has a Balanced Demographic

Average rent: $661

Average home price: $133,600

Lexington is the county seat of Henderson County and is located between Nashville and Memphis. It has a population of 7,956, and the majority comprises young families. The population is pretty diverse, consisting of whites, Native Americans, African Americans, Asians, Latinos, and other races.

The cost of living is pretty affordable as its cost of living index is nearly 20% less than the city’s average. The median income in Lexington is $43, 940 which is pretty decent for a town whose utility, transportation, and grocery costs are below the nation’s average. However, health care costs are steeper (123%) than Tennessee’s and the nation’s average.

As for entertainment spots, Lexington is known to have the most barbeque restaurants than any other city in the country. Locals also visit Beech Lake, a popular swimming and camping destination, and the Beech River Heritage Museum to view historical artifacts.

6.  Memphis: Best for Setting up Business

A wide lens photo of the Smoky Mountains. A series of 6 hills can be seen in the distance. The sun is rising, coloring the sky pink and orange

Average rent: $842

Average home price: $ 93,700

Located in the southwestern region of Tennessee, Memphis is the second-largest city. Influential music genres like rock n’ roll, blues, and soul are believed to have originated from here.

Memphis also has the highest population (633,885) in Tennessee, thanks to its low cost of living, which is 18% lower than the national average. The population is pretty balanced, but African Americans make the largest percentage. Homes are also very affordable, making Memphis a great place to live whether you’re starting life or have a family.

The city has also become very attractive to startups and entrepreneurs. A study conducted by Wallethub ranked Memphis number 7 for business. The cities were ranked based on metrics such as a five-year survival rate, access to financing, cost of living, and office space.

So far, Memphis is home to top employers like AutoZone, FedEx, St. Jude Children’s Research Hospital, and ServiceMaster.

As for education facilities, Memphis has a balanced mix of public and private schools (290), with most of them ranking among the top 20 in the state. There are many fun places to visit too for the entire family.

  • Children’s Museum of Memphis
  • Pink Palace Museum
  • Memphis Zoo
  • Peabody Duck March
  • National Civil Rights Museum

7.  Johnson City: Has the Best Climate

Average rent: $733

Average home price: $193,400

Ranked among the best places to live in the U.S. in 2018, Johnson City is pretty affordable in Tennessee. According to the Livability.com survey, the city’s natural beauty and pleasant climate played a critical role.

The city has a sizable population of 71,000 people. According to a 2019 survey, the city’s median household income is $41,682, with adults earning approximately $24.97 per hour. A review of the respective factors used to determine the cost of living shows the city ranks reasonably well.

The cost of living is 18% less than the nation’s average, but the grocery, utility, and health costs take a fair bit of a resident’s income. Housing is also a little steep as a 2015-2019 survey shows renters spend 30% or more of their income on housing.

Johnson City has a variety of outdoor activities, too, whether you like fishing, mountain climbing, boating, or hunting. The scenic roads also provide the most beautiful winding ribbons for biking enthusiasts.

8.  Alcoa: Best for Affordable Housing

Average rent: $820

Average home price: $190,900

Alcoa is located in the southern region of Knoxville, fifteen miles away. It’s among the cheapest places to live in Tennessee, ranking number 245/273 across the U.S. for the cost of living. It has a cost of living index of 84.7%.

The grocery, health, housing, and utility indices are well below the 100 national thresholds. The housing index is particularly low (63.4%), which means homes are affordable whether you’re renting or buying a home.

The rule of thumb dictates that one should not spend more than 30% of their income on rent, and Alcoa’s housing cost is within this threshold. Alcoa is also home to the McGhee Tyson Airport, which has flights to and from major cities like Atlanta, Chicago, Miami, Boston, Detroit, and New York.

Alcoa seems a little hushed than other states in Tennessee, but there are fun activities you can enjoy. You can camp, bike, hike on the foothills of the Great Smoky Mountains of fish in the Little River. The city also has several parks.

9.  Oak Ridge: Best for Young Professionals

Average rent: $720

Average home price: $135,400

Located in the eastern region of Tennessee, Oak Ridge is another great place for homeowners looking for affordable homes. It has nearly 30,000 residents, and the majority comprises young professionals.

The quaint suburb has a neighborly feel as most residents (63%) are homeowners with average household sizes of 2.4 members. The median income of Oak Ridge households is estimated to be $29,811, which is pretty decent for a city whose cost of living is 16.1% cheaper than the nation’s average.

The town has also experienced a dramatic increase (0.9%) in the job market over the last year. It explains the decline in the unemployment rate estimated at 4.4%, lower than the nation’s 6.0%.

Accessibility to playgrounds, parks, and other entertainment places is critical for households with kids. Luckily Oak Ridge has 16 parks, including Big Turtle Park, Cedar Hill Park, and the A. K. Bissell Park. The playgrounds have recreational facilities for kids and adults too.

10.  Milan: Best for Young Families

Average rent: $678

Average home price: $107,100

This small city is located 25 miles north of Jackson. It’s primarily known for its innovations in farming, including pioneering no-till agriculture. Milan is home to the West Tennessee Agricultural Museum, the Milan Army Ammunition Plant, and historical sites.

Milan has 7,703 people and has a balanced mix of rural and urban areas. The city’s population comprises young adults and newlyweds planning to start a family.

The cost of living is pretty affordable as it’s 16% lower than the nation’s average. And with the town’s household income increasing over the last year to $43,509, young families may find Milan a pretty comfortable place to settle down.

Property prices have increased (by 5%) over the last year but are still reasonable compared to other towns in Tennessee. Homes located near highly-rated public schools have higher prices. The median rent is also affordable, allowing new residents to give the city a try before committing to purchase a home.

11.  Knoxville: Has the Best Public Schools

An aerial photo of Knoxville. A lot of green grass and trees in the front of the picture. Large buildings in the back. A gold globe like structure can also be seen

Average rent: $856

Average home price: $257,300

According to the U.S. News & World Report on the Best Places to Live, Knoxville ranks 46 out of the 125 most populated places.

The high population is primarily due to the town’s affordable housing and cost of living. Its housing market index is 25% lower than the rest of the country hence its attractiveness to settle in Tennessee.

Knoxville’s cost of living index is 85.5%, qualifying this city to our list of cheap places to live in Tennessee. None of the significant cost indices is over the national average allowing the average family to save on groceries, transportation, healthcare, and utilities.

Beyond affordable housing and cost of living, Knoxville has the best public schools in the state. The city is home to 80 public schools, which are rated A+. Farragut High School, for example, the seventh-best public high school in Tennessee, is in Knoxville.

12.  Clarksville: Best for Low-Interest Home Mortgages

Average rent: $733

Average home price: $231,200

The city has consistently ranked among the best places to live in the country. In 2019, Money Magazine named it the best place to live based on affordability, amenities, diversity, among other factors. According to the cost of living index, Clarksville is just 14.4 points shy of the nation’s average.

Grocery, health, and transportation costs are a few points below 100, but housing costs have increased over the last year due to the low-interest rates on home loans. Before the surge, the median home price was $154,000, which is pretty affordable compared to the nation’s average of $231,000.

Even so, new residents continue to purchase homes due to the city’s abundance of affordable housing options. Clarksville’s social life has also grown over time. The city’s downtown area has mainly seen more eateries and boutiques open.

The community hosts many events and live music nearly every night for entertainment. It has public parks too, community events, and walking trails.

13.  Sevierville

Average rent: $928

Average home price: $283,000

Sevierville is a great example of a town with the best of both worlds. It has a dense suburban feel but is very affordable for any family earning a median income ($ 43,233). The city’s cost of living index is 12.9 points lower than the national average, which is pretty affordable.

You get to save on grocery, health, housing, and transportation costs, but utilities’ cost is quite steep. Housing is also affordable as its index is lower than the national threshold, but it’s higher than Tennessee’s.

What stands out about the city is the many tourist attractions, including NASCAR SpeedPark, Tennessee Museum of Aviation, to mention a few. The town attracts many tourists every year hence the increasing construction of cabins.

14.  Middle Valley: Best for Upper Middle Class

Average rent: $1,030

Average home price: $233,700

If you’re looking for a classy suburb that still has an affordable cost of living, Middle Valley is a solid pick. It has a relatively large population of 12,061 people whose median age is 38.9. Most of the residents are Caucasian and Whites, with the minority group consisting of Hispanic, Black, and Asian communities.

The town’s overall cost of living is 88.6, making Middle Valley the most affordable, upper-middle-class city in Tennessee. Other factors like utilities, health, and groceries are well below the national average, which means you’ll be getting a lot of bang for the buck.

Housing prices are a little steep, exceeding the state’s average price of $231,600, but most households may find homes affordable with a median household income of $68,925.

15.  Chattanooga: Best Prime Location

Average rent: $818

Average home price: $150,000

Chattanooga is another hotspot in Tennessee. It’s the fourth-largest town in the state, with an estimated population of 182,799 people. The larger population comprises young families and professionals looking for affordable homes.

The cost of living is pretty low, as it’s 10% less than the nation’s average. Groceries and healthcare are pretty close to the U.S. average, but transportation and utility costs are 10% cheaper.

Besides affordability, Chattanooga’s prime location makes it pretty attractive to new residents. It’s located on the Tennessee-Georgia border providing quick access to southern cities like Nashville, Atlanta, Huntsville, and Knoxville. The average commute time is 18 minutes, much lower than the nation’s average.

The city has also become attractive to startup companies looking for cheaper San Francisco and New York alternatives. Companies like Bellhop, Branch Technology, and FreightWaves are set up here.

The new developments have also provided lots of employment opportunities for locals. Top employers like Hamilton County Schools, Volkswagen Group of America, and Erlanger Health System have set base here.

The city is known for its bustling nightlife, thanks to the young people from the University of Tennessee. Many outdoor activities include boating, water skiing, fishing, and swimming at the little-known Lake Chickamauga.

A photo of an old wooden mill in Pigeon Forge. The river goes over a dam, making a waterfall

Conclusion

Whether you’re looking for a bustling metro area or a tight-knit small-town feel, there’s a variety of places to choose to live in Tennessee.

The mentioned places not only have friendly people who can make the best neighbors but are also safe. Moreover, the state’s natural beauty and mild temperatures make the state ideal for people of all ages including retirees.

Related: 25 Pros and Cons of Living in Tennessee