Tennessee home prices 2026: $378K median, and a property tax surprise

You've seen the pitch: move to Tennessee, keep your whole paycheck, zero state income tax. Then you run a real mortgage quote on a 3-bed in Nashville, plug in whatever property tax rate Google handed you, and the total doesn't look like the deal you were promised. That gap between the advertised tax rate and what actually shows up on a closing disclosure is worth sorting out before you go any further.

This page covers where Tennessee prices actually stand across four cities with very different personalities, what a real mortgage payment on the state's median home costs against what Tennessee households actually earn, and — because our own reporting caught this the hard way — why the property tax rate most sites quote for Nashville, Memphis, and Knoxville understates what an in-city buyer actually pays. Tennessee-specific figures below were last checked September 27, 2026.

Tennessee housing market snapshot

Tennessee's statewide median sale price reached $378,325 in August 2026, up 0.9% from a year earlier, with the typical home taking 66 days to sell and 7,697 homes changing hands that month, down 5.1% year over year (Redfin, August 2026). Homes that do sell are going for 97.4% of list price on average, and 14.3% sold above asking — signs of real, if modest, competition rather than a market cooling off fast.

Zillow's typical-value index, which tracks the whole housing stock rather than just what closed that month, tells a slightly different story from the same market: Tennessee's typical home value stood at $334,108 as of August 31, 2026, up a smaller 0.7% year over year. Both numbers are accurate and both are useful — Redfin's median reflects the mix of homes that actually sold, which can run higher than the value of a typical home if lower-priced buyers are getting squeezed out by today's rates, while Zillow's index smooths across every home, sold or not. The roughly $44,000 gap between the two is a mix effect, not a disagreement about direction.

Active inventory sat at 36,662 listings statewide as of August 2026 (FRED, Housing Inventory: Active Listing Count in Tennessee, updated September 4, 2026), which works out to about 4.8 months of supply against August's sales pace — tight enough to keep sellers with reasonably priced homes in a decent negotiating position. So what for you: don't assume "up only 0.9%" means the market has gone soft everywhere — inventory is still thin enough, and homes are still closing close enough to asking price, that a well-priced listing in a popular Nashville-area suburb can draw competing offers even while the statewide average barely moves.

Is Tennessee a buyer's or seller's market?

By the numbers, Tennessee leans toward sellers, though not dramatically. Four to six months of supply is generally considered a balanced market, and Tennessee's 4.8 months sits right at the seller-favoring edge of that range. Combine that with a 66-day median time on market, a 97.4% sale-to-list ratio, and 14.3% of homes selling above asking (Redfin, August 2026), and the overall read is a market with genuine, if not frantic, competition for well-priced homes.

That statewide picture hides real variation by city. Memphis moves in 36 days with prices down 2.2% year over year — fast because it's cheap, not because it's hot. Nashville takes 64 days with prices essentially flat, a market that has cooled from its pandemic-era frenzy without collapsing. So what for you: treat the "seller's market" label as a starting point for negotiation, not a reason to skip it — in Nashville specifically, sellers gave concessions on 75.5% of spring 2026 sales, the highest rate of any major metro tracked, so asking rarely costs you anything.

Can you actually afford a home in Tennessee?

At the statewide median of $378,325, 10% down, and today's 7.03% rate (Freddie Mac PMMS, September 24, 2026), principal, interest, an estimated 0.55% property tax rate (propertytaxrates.org, 2026), the state's $3,408 average annual insurance premium (LendingTree, June 2026), and PMI run approximately $2,885 a month. Under the standard 28% affordability rule, that requires roughly $123,640 in household income — 72% above Tennessee's actual median household income of $72,000 (U.S. Census Bureau, 2024 American Community Survey).

Nashville specifically is a harder case. At its $475,538 median and the same terms, using the city's real 0.82% in-city effective property tax rate rather than a county-wide blend, the payment climbs to roughly $3,661 a month, requiring about $156,900 in income — more than double the state median. That's the honest math behind Nashville's population growth: Davidson County added nearly 9,300 residents in 2025, a 1.3% gain (Axios Nashville, April 2026, citing University of Tennessee analysis), and that growth is disproportionately relocating professionals who can clear an income threshold most Tennesseans can't, not a broad-based influx of median earners. So what for you: the math points toward looking outside Davidson County proper — Knoxville or Chattanooga, both covered below, put a Tennessee mortgage within reach of an income much closer to the state median.

Tennessee cities to watch

Nashville carries the state's highest price tag at a $475,538 median, down a marginal 0.52% year over year with homes taking 64 days to sell (Redfin, August 2026) — a market that has cooled from its peak without cratering, propped up by continued in-migration into the surrounding counties.

Memphis is the affordability outlier, with a $187,276 median, down 2.2% year over year, and the fastest pace in the state at 36 days on market (Redfin, August 2026). It's also the market our own investor reporting has focused on — see the cities-to-watch note under investors below.

Knoxville sits in the middle at a $324,785 median, up 1.5% year over year with a 54-day median time on market (Redfin, August 2026) — closer to a state-median buyer's reach than Nashville, without Memphis's price volatility.

Chattanooga is quietly the fastest-accelerating market in the state: a $363,509 median, up 1.0% year over year, with days on market dropping from 58 to 41 over the past twelve months (Redfin, August 2026) — a market picking up speed while most of the state holds steady. Our Atlanta vs Nashville comparison and Nashville vs Huntsville comparison both found Tennessee's no-income-tax advantage narrows the gap with pricier or cheaper neighbors once the full monthly cost is run. So what for you: if Nashville's price has priced you out, Knoxville and Chattanooga are the two Tennessee markets currently offering the best combination of affordability and momentum — worth a look before you widen the search out of state.

Rent vs buy in Tennessee

A 3-bedroom apartment in Nashville averages $2,469 a month for about 1,425 square feet (RentCafe, August 31, 2026), against a buy payment of roughly $3,661 a month at 10% down on the metro's median home — a gap of about $1,192 a month in renting's favor. Nashville's overall average rent across all unit sizes is $1,864, up just 0.16% year over year, which tells you rents have gone essentially flat while home prices, even flat themselves, still sit well above what renting costs.

The math doesn't automatically favor buying here the way it does in states with runaway rent growth — Tennessee's rent increases have simply stopped outpacing wages the way home prices already have. So what for you: run your own numbers in our rent vs buy calculator before assuming a shorter break-even — at Nashville prices and today's rate, buying only wins over renting if you're confident you'll stay long enough for appreciation and equity paydown to close a four-figure monthly gap.

First-time buyers in Tennessee

Tennessee's Housing Development Agency (THDA) runs the Great Choice Home Loan program alongside Great Choice Plus, which offers first-time buyers with a 640+ credit score a choice between $6,000 in deferred, 0%-interest down payment assistance with no monthly payment, or $15,000 as a second amortizing loan at 2% interest, running about $138 a month over 10 years (THDA program details, 2026). Nashville-area buyers also have access to The Housing Fund, offering up to $35,000 in deferred second-mortgage assistance for buyers with a 600+ credit score and income up to 120% of area median income, plus THDA's Homeownership for Heroes program, which knocks 0.5% off the first mortgage rate for eligible military, veterans, first responders, teachers, and healthcare workers — worth roughly $2,250 a year on a $450,000 loan.

PMI is the other line item to plan for below 20% down — on a Tennessee median-priced home, expect $150 to $200 a month depending on credit score, though it's temporary and cancels once you reach 20% equity. So what for you: if you're a first-time buyer, price out Great Choice Plus and, if you're buying in the Nashville metro, The Housing Fund before you assume you need a full 10% saved — stacking one of these with the Heroes rate reduction, if you qualify, changes the math on when you can actually afford to buy.

Real estate investors in Tennessee

Memphis is the one Tennessee market that has consistently cleared lender-side DSCR tests, but it still doesn't cash-flow once real operating costs are included. At a representative $165,000 entry-tier purchase, 25% down, and today's 7.03% rate (Freddie Mac PMMS, September 24, 2026), PITI runs approximately $1,292 a month using Tennessee's $3,408 average annual insurance premium (LendingTree, June 2026) and Memphis's real 1.32% in-city effective property tax rate — well above the roughly 0.89% county-wide average most sources quote, because Memphis layers its own city rate on top of Shelby County's (PropertyPundit analysis, August 28, 2026, citing City of Memphis and Shelby County tax records). Against a representative $1,400 monthly rent for a 3-bedroom single-family rental (Rentometer, RentHop, and Zillow, averaged), that's a DSCR of 1.08, enough to pass most lenders' 1.0 minimum, but after a 5% vacancy allowance, 8% property management fee, and a 1.5%-of-price annual maintenance reserve, the property runs a loss of roughly $280 a month.

That $284-a-month insurance figure is a statewide average across every home value and coverage level in Tennessee, and it likely overstates what a $165,000 entry-tier rental actually costs to insure — our own on-the-ground pricing for this exact class of Memphis property came in closer to $150 a month, which narrows the monthly loss to roughly $146 instead of $280. Either way, the deal doesn't cash-flow today; the statewide average and the property-specific quote disagree on the size of the loss, not on the direction of it. The math points toward Memphis working as a tax-efficiency and appreciation hold for an investor who already has cash flow covered elsewhere, not as a source of month-one income — see our full Memphis, Nashville, and Knoxville investor breakdown for the city-by-city DSCR numbers, and our Nashville vs Memphis comparison for how the two metros stack up on a monthly-cost basis.