Is East Tennessee Affordable? A 2025 Cost of Living Guide

When people dream about moving to our part of the world, they usually picture the morning mist rolling off the Great Smoky Mountains or a quiet afternoon by the Tennessee River. But once the daydreaming stops, the calculator has to come out. Is living here actually affordable anymore?

To answer that, we have to define what “here” actually is. When we talk about East Tennessee, we are covering a massive stretch of land that includes the energetic college town of Knoxville, the tech-forward scenic hub of Chattanooga, and the quieter, value-driven Tri-Cities area (Johnson City, Kingsport, and Bristol).

Here is the honest truth: the secret is out. High quality of life mixed with lower expenses has drawn a lot of people here, and that demand has pushed prices up on East Tennessee real estate. However, compared to the national average—and certainly compared to the coastal markets many people are fleeing—this region remains a financial haven. While housing has jumped in price, the tax benefits alone can still make the math work in your favor.

East Tennessee Cost of Living vs. National Average

If we look at the big picture, our region consistently ranks below the national baseline for cost of living. If the national average is set at 100, East Tennessee generally lands somewhere between 85 and 95, depending on exactly where you plant your roots.

There is a distinct split between the urban and rural markets here. If you are looking at the heart of Knoxville or the hip North Shore of Chattanooga, you might find costs inching closer to that national average. These areas have amenities, walkability, and jobs that command a premium.

However, once you drive twenty minutes outside those metro hubs into the surrounding counties, the cost of living drops significantly. In those rural pockets, your dollar stretches much further, often dipping into the 75 to 80 range on the index. While goods and services cost roughly the same wherever you shop, land and housing costs in the countryside bring the average down heavily.

Housing Costs: Buying vs. Renting

Let’s talk about the biggest line item in your budget. The housing market here has shifted from “bargain bin” to “competitive,” but it is still attainable for many. Inventory shortages in the major cities have created a seller’s market, so you need to be prepared to move fast.

Buying a Home

Home prices vary wildly depending on your zip code. In the hottest neighborhoods of Knoxville or Chattanooga, you might see median home prices ranging from $350,000 to $450,000. These are the areas with easy access to coffee shops, riverwalks, and major employers.

If those numbers make you blink, look toward the Tri-Cities or the rural counties between the metros. In places like Johnson City or the outskirts of Hamilton County, you can still find solid single-family homes in the $200,000 to $300,000 range. Buying a home in Tennessee often gets you more square footage and a bigger yard than you would get for the same money in other states.

Renting

If you aren’t ready to buy, the rental market follows a similar trend. Demand is high, and rents have ticked up. For a decent one-bedroom apartment in a desirable city center, you are likely looking at $1,200 to $1,500 per month. A two-bedroom unit or a small rental house will usually run between $1,400 and $1,800 per month.

A Note on Insurance

One cost that catches newcomers off guard is homeowners insurance. While we don’t have coastal hurricanes, we do get severe storms and occasional tornado risks. Insurance rates are climbing across the Southeast, so it is smart to budget a little extra here rather than assuming the national average applies.

Utility Costs and Energy Bills

This is one category where East Tennessee shines. We are powered by the Tennessee Valley Authority (TVA), a federally owned electric corporation that generally keeps our rates competitive. Because of this hydroelectric legacy, our electricity rates often sit slightly below the national average.

For a standard 915-square-foot apartment, you might expect a combined utility bill (electric, heating, cooling, water, garbage) to run somewhere between $150 and $200 per month. Of course, this fluctuates with the seasons. Our summers are humid and hot, meaning your AC will be running a marathon from June through September. Conversely, our winters are generally mild, which gives your heater—and your wallet—a break.

When it comes to staying connected, the region is surprisingly advanced. Chattanooga is famous for its “Gig City” reputation, offering some of the fastest residential internet in the western hemisphere through EPB. Knoxville and other areas are catching up with fiber options as well. Expect to pay between $70 and $100 per month for high-speed internet.

Food, Groceries, and Transportation

Daily living expenses are a mixed bag here due to our unique tax structure.

Groceries and the Tax “Gotcha”

Day-to-day groceries like milk, eggs, and bread usually ring up pretty close to the national average, and in a lot of stores they actually come in just a bit cheaper. However, you need to watch out at the register. Tennessee applies sales tax to groceries. While the state recently lowered the rate specifically for food, local taxes still apply. Seeing a tax added to your banana bunch can be a shock if you are moving from a state that exempts groceries, so budget accordingly.

Getting Around

Unless you live in downtown Knoxville or Chattanooga, living in East Tennessee requires a car. Public transit systems like KAT (Knoxville) and CARTA (Chattanooga) exist, but they don’t offer the comprehensive coverage needed for most commuters.

The good news is that keeping a car here is relatively cheap.

• Gas: Prices are typically $0.20 to $0.40 cheaper per gallon than the national average due to lower state gas taxes.
• Registration: Fees are reasonable.
• Property Tax: Unlike some of our neighbors (looking at you, Virginia), Tennessee does not charge an annual personal property tax on your vehicle.

The Tax Advantage: Income, Sales, and Property Taxes

This section is usually the deal-sealer for people considering a move to Tennessee. The tax structure is very different from most other states, and understanding it is key to your financial planning.

• No State Income Tax: This is the headline. Tennessee does not tax your wages. If you earn $100,000, you don’t send a percentage of that to the state capital. This is a massive raise for people moving from high-tax states. It also applies to retirement income—social security and pensions are tax-free.
• Low Property Taxes: Property taxes in East Tennessee are incredibly low compared to the Northeast or Midwest. Effective rates are often around 0.6% to 0.7% of the home’s value, though this varies by county.
• The Trade-off (Sales Tax): The government has to get its money somewhere. In Tennessee, that “somewhere” is the cash register. The combined state and local sales tax often hits between 9.5% and 9.75%. It is a consumption-based system: you keep more of what you earn, but you pay more when you spend it.

Cost Comparison: Knoxville vs. Chattanooga vs. Tri-Cities

While the region shares a culture, the costs do differ between the metro areas.

Knoxville

As the home of the University of Tennessee and the gateway to the Smokies, living in Knoxville is increasingly in demand. Housing prices here are rising the fastest among the three. It is vibrant and growing, but you will pay a “popularity premium” to be close to the action.

Chattanooga

Famous for its outdoor lifestyle and tech scene, moving to Chattanooga offers a unique blend of city and nature. Housing is competitive, especially in historic neighborhoods and near the river, but there is still a wide variety of options. It generally tracks closely with Knoxville on price but offers a different, slightly more modern industrial vibe.

The Tri-Cities

If affordability is your top priority, look at living in Johnson City, Kingsport, or Bristol. This area moves at a slightly slower pace and housing costs can be 10% to 20% lower than Knoxville or Chattanooga. It is an excellent option for retirees or remote workers who want the mountain scenery without the higher price tag.

How Much Money Do You Need to Live Comfortably?

“Comfortable” is subjective, but let’s put some numbers on it based on current data.

If you are a single renter, you likely need a pre-tax income of $35,000 to $45,000 to cover a decent apartment, utilities, car payment, and savings without feeling squeezed.

For a home of four looking to buy a home, the bar is higher. To comfortably manage a mortgage, two cars, childcare, and groceries, a household income of $80,000 to $100,000 is a realistic target. This allows you to live a good life—dining out occasionally and enjoying the local attractions—rather than just surviving.

Is Moving to East Tennessee Worth It Financially?

So, is it worth it? For the vast majority of transplants, the answer is a resounding yes.

The combination of no state income tax and low property taxes creates a financial environment where it is easier to build wealth and save for the future. Yes, housing prices have risen, and the sales tax is high. But when you stack the total cost of living against the incredible quality of life—the hiking, the lakes, the music, and the community—East Tennessee remains one of the best value propositions in the country.

If you are thinking about making the move, the best time to start looking was yesterday. As more people discover what we have here, the bargain window is slowly closing, but it is certainly still open.

Frequently Asked Questions

Is it expensive to live in East Tennessee?

Compared to the national average, it is not expensive. Most residents enjoy a cost of living that is 5% to 15% lower than the U.S. baseline, though prices for housing in popular hubs like Knoxville and Chattanooga have risen significantly in recent years.

What is a good salary to live comfortably in Knoxville, TN?

For a single person, a salary between $40,000 and $50,000 is generally sufficient to live comfortably. For a home of four aiming to own a home, a combined household income of $90,000 to $100,000 allows for a comfortable lifestyle with savings.

Does Tennessee have state income tax?

No, Tennessee does not have a state income tax on earned wages. This allows residents to take home a larger portion of their paycheck compared to residents in states with income tax, which is a major financial draw for the region.

How do property taxes in East Tennessee compare to other states?

Property taxes in East Tennessee are on the low side compared to a lot of the country. The exact bill depends on the county and what your home is worth, but many homeowners here end up paying noticeably less each year than they would for a similar house in much of the Midwest or Northeast. For a lot of people, that softer property tax hit helps balance out Tennessee’s higher sales tax.