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Crunching costs, sorting signals, rendering insights.
Crunching costs, sorting signals, rendering insights.
Dollar for dollar, few states match Tennessee's value. That's more or less in line with the region. 6 out of 6 cities undercut the national cost index of 112. Leading the pack: Memphis at index 86, where median rent of $1,234/month saves renters $7,932/year versus the national median.
Dollar for dollar, few states match Tennessee's value. That's more or less in line with the region. 6 out of 6 cities undercut the national cost index of 112. Leading the pack: Memphis at index 86, where median rent of $1,234/month saves renters $7,932/year versus the national median.
Memphis earns its position at #1 through a combination that's hard to replicate. And broadly, the 86 cost index sits 26 points below the national baseline, and the $51,211 median income means purchasing power here is amplified by the low cost base. Homes list at $142,870 — $324,500 below the national median — a genuine ownership opportunity. On the cost side, Housing leads the way at 66, while Healthcare trails at 89.
The 3.5× rule is a conservative benchmark: lenders often approve up to 4-5× income, but 3.5× keeps monthly payments safely under 28% of gross income at typical rates. On $60K, that means targeting homes under $210,000. Memphis offers a median home at $142,870 — a 2.4× ratio with room to spare.
And there's one more thing: The 6 cities we track in Tennessee paint a clearly affordable picture. And broadly, average cost index: 100. Median rent: $1,545/month. Household income: $63,576. Tennessee is known for no income tax, Nashville boom, and Memphis blues — and the data backs that reputation convincingly.
Real talk: If you're ready to act on this, three things to do next: 1) Click into the city pages for the top 3 and check rent trends — direction matters more than the snapshot. 2) Run your income through the salary calculator for a personalized cost comparison. 3) Compare your top two picks head-to-head on our comparison page. The data is here; the decision is yours (we double-checked this one).
#1 Ranked: Memphis — cost index 86, rent $1,234/mo, income $51,211
6 of 6 cities come in below the national cost-of-living average of 112
Data sourced from Census Bureau, Zillow, BLS, and Tax Foundation — current as of 2026
| Rank | City | Cost Index | Median Rent | |
|---|---|---|---|---|
| 1 | Memphis | 86 | $1,234 | Details |
| 2 | Clarksville | 96 | $1,376 | Details |
| 3 | Chattanooga | 98 | $1,499 | Details |
| 4 | Murfreesboro | 106 | $1,683 | Details |
| 5 | Nashville | 108 | $1,772 | Details |
| 6 | Knoxville | 104 | $1,708 | Details |
618,639 residents · Tennessee
The way we see it, a closer look at Memphis: the cost index of 86 — make of that what you will — breaks down to a Housing index of 66 (strongest category) and a Healthcare index of 89 (weakest). Median rent is $1,234/month — 35% below the national median — while household income sits at $51,211, meaning locals spend about 29% of income on rent. That's within the recommended 30% threshold, though it doesn't leave much room.
180,716 residents · Tennessee
Clarksville earns its position at #2 through a combination that's hard to replicate. The 96 cost index sits 16 points below the national baseline, and the $66,786 median income means purchasing power here is amplified by the low cost base. Homes list at $316,024 — $151,346 below the national median — a genuine ownership opportunity. On the cost side, Utilities leads the way at 89, while Healthcare trails at 99 (which, to be fair, is a metric that favors smaller cities).
187,030 residents · Tennessee
Why Chattanooga ranks #3: the numbers tell a clear story. At 98 on the cost index, residents save roughly 14% less than the typical American. Rent sits at $1,499/month while the median household pulls in $61,028/year. The Utilities category is particularly strong at 90, though Healthcare (101) lags behind. Home prices average $314,306 — $153,064 below the national median.
165,430 residents · Tennessee
Why Murfreesboro ranks #4: the numbers tell a clear story. That alone makes it worth considering. At 106 on the cost index, residents save roughly 6% less than the typical American. Rent sits at $1,683/month — worth pausing on — while the median household pulls in $76,241/year. The Utilities category is particularly strong at 98, though Housing (116) lags behind. Home prices average $421,928 — $45,442 below the national median.
687,788 residents · Tennessee
What does daily life actually cost in Nashville? Start with the 28% rent-to-income ratio — tight but manageable for most households. On the category level, Utilities (index 99) is where the real savings show up, while Housing (index 120) is the line item most likely to surprise newcomers. Income at $75,197 and homes at $429,861 round out a profile that ranks #5 for clear reasons.
| City | State Tax | Sales Tax | Property Tax | Est. Take-Home |
|---|---|---|---|---|
1Memphis | 0% | 9.55% | 0.56% | $40,974 |
2Clarksville | 0% | 9.55% | 0.56% | $40,974 |
3Chattanooga | 0% | 9.55% | 0.56% | $40,974 |
4Murfreesboro | 0% | 9.55% | 0.56% | $40,974 |
5Nashville | 0% | 9.55% | 0.56% | $40,974 |
6Knoxville | 0% | 9.55% | 0.56% | $40,974 |
Memphis ranks #1 in Tennessee for this analysis with a cost index of 86 and median income of $51,211.
Our cost of living index uses real Zillow rent data as the foundation, indexed to 100 (national median). Sub-categories (housing, food, transport, utilities, healthcare) are derived from the overall index with regional adjustments. Data is updated monthly.
Memphis (ranked #1) has a cost index of 86 and rent of $1,234/mo, while Knoxville (ranked #6) has a cost index of 104 and rent of $1,708/mo — a 18-point difference in cost of living.
City data is refreshed monthly from Census Bureau population estimates, Zillow rent and home price indices, BLS salary data, and Tax Foundation tax rates. Last updated: 2026.
The median 1-bedroom rent in Memphis is $1,234/month as of 2026, based on Zillow's Observed Rent Index. This is $661 below the national median of $1,895/month.
The median home price in Memphis is $142,870, which is 2.8× the local median income. That's within the standard 3.5× affordability rule for most local earners. The national median home price is $467,370.
Tennessee has a 0% state income tax rate — one of the states with no income tax. Combined state and local sales tax averages 9.55%, and the effective property tax rate is 0.56%.
This ranking was generated using data current as of early 2026. Population and income data comes from the Census Bureau's American Community Survey (5-year estimates). Rent and home price data is from Zillow's monthly releases. Tax rates are from the Tax Foundation's 2025 edition. Rankings are refreshed monthly.