Income needed to buy a house in Tennessee
A median-priced home in Tennessee costs $332,600. With 20% down you'd need about $85,806 a year, $13,809 more than the state's median household income of $71,997. Tennessee ranks #21 of 51 for the lowest income needed.
Income needed: $85,806 a year
Defaults: state median home value and property tax (Census ACS 2024), median homeowners insurance paid by owners with a mortgage (Census ACS 2024; quotes vary by home and ZIP code), 30-year rate 6.95% (Freddie Mac, week of 2026-09-17).
You'd need a household income of about $85,806 a year to buy a $332,600 home in Tennessee with $66,520 down.
Based on lenders' 28/36 rule: housing costs under 28% of gross income, all debt under 36%.
| Monthly cost | Amount |
|---|---|
| Principal & interest | $1,761 |
| Property tax | $124 |
| Homeowners insurance | $117 |
| Total | $2,002 |
Monthly cost by down payment
| Down payment | Cash down | Monthly cost | Income needed |
|---|---|---|---|
| 5% | $16,630 | $2,464 | $105,602 |
| 10% | $33,260 | $2,347 | $100,587 |
| 20% | $66,520 | $2,002 | $85,806 |
Under 20% down includes estimated private mortgage insurance of 0.5% of the loan per year.
Buying in Tennessee: what's different
- Transfer tax
- 0.37% transfer tax
- On the median home
- $1,230
- Homestead break
- None (tax relief 65+)
- First-time buyer help
- Tennessee Housing Development Agency
- Transfer and recording taxes. The realty transfer tax is 37 cents per $100 of the price (0.37%), and a new mortgage is taxed at 11.5 cents per $100 of the loan above the first $2,000. On the median Tennessee home ($332,600), that's about $1,230 in transfer tax.
- Property tax breaks for your home. There's no homestead exemption. Low-income owners 65 and older, disabled owners and disabled veterans can have part of their tax paid back through the state Tax Relief program; apply with the county trustee.
- First-time buyer help. The Tennessee Housing Development Agency offers the Great Choice Home Loan through participating lenders. Check its site for income and price limits.
Checked against official sources on September 25, 2026. Local transfer taxes and exemptions vary, so confirm with the county before you close.
Home prices in the Tennessee metro areas we cover
| Metro area | Income needed | Median home value | Median household income |
|---|---|---|---|
| Nashville, TN | $114,620 | $449,300 | $88,800 |
| Memphis, TN | $75,991 | $282,900 | $68,124 |
| Knoxville, TN | $89,401 | $351,400 | $74,184 |
| Chattanooga, TN | $85,029 | $324,500 | $75,076 |
| Clarksville, TN | $76,731 | $291,700 | $72,347 |
With 20% down, the median home takes about $75,991 a year in the Memphis area and $114,620 in the Nashville area, compared with $85,806 for the statewide median.
Metro medians from Census ACS 2024 cover the whole metro area, including any part in a neighboring state. Income needed: 20% down at 6.95%, the metro's median property tax and its main state's median homeowners insurance for homes with a mortgage (Census ACS 2024), under the 28% rule.
What makes owning in Tennessee about average among states
- Home prices: the median value of $332,600 is 8% below the U.S. median of $360,600.
- Property tax: about 0.45% of value a year ($124 a month on the median home).
- Insurance: owners with a mortgage paid a median $1,402 a year for homeowners insurance in 2024 (Census ACS). Premiums have risen in most states since then, and they vary a lot by home and ZIP code, so get quotes.
- Mortgage rate: each 1-point rise in rates adds roughly $182 a month on this loan.
9 states need at least 20% less income to buy their median home. States with a similar income requirement:
- Wisconsin $84,055
- North Carolina $87,708
- Illinois $87,942
- South Dakota $82,476
- Wyoming $89,976
- Nebraska $80,722
Frequently asked questions
How much do you need to make to buy a house in Tennessee?
About $85,806 a year for the median home of $332,600 with 20% down at 6.95%. With 10% down it's about $100,587.
What is the property tax rate in Tennessee?
The median Tennessee homeowner pays $1,488 a year, about 0.45% of the median home value (Census ACS 2024). Rates vary by county and city.
Is it cheaper to rent or buy in Tennessee?
Median rent is $1,284 a month, while owning the median home costs about $2,002 a month with 20% down, before maintenance. Renting affordably takes about $51,360 a year under the 30% rule.