Are you thinking about moving to Nashville? One of many concerns you may have is whether you can afford it and how much it costs to live in Music City.
Is Nashville expensive? Despite being the most expensive city in Tennessee, the Nashville cost of living is still below the national average! Be braced for high home prices and a competitive housing market, but otherwise, the city offers affordable health care, food, and utilities plus no state income tax!
What is the cost of living in Nashville, TN? Here’s a complete look at every facet of Nashville living expenses from housing and utilities to taxes and average income.
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Nashville, TN Cost of Living Index
What is the cost of living in Nashville, Tennessee? To answer this question, you need to consider many metrics starting with the cost of living index (COLI). This index helps you compare living costs between cities and regions by tracking the costs of basic services and goods in comparison to the national average.
The Nashville cost of living index is 95.4. That makes the Nashville metro area 4.6% more affordable than the national average. Virtually all major living expenses are more affordable in Nashville than the U.S. average, especially health care and utilities. By comparison, the Tennessee cost of living index is 87.6 or 12.4% below the national average.
You can use the Family Budget Calculator from the Economic Policy Institute to estimate your cost of living in Nashville based on your household size. The average family of four would need $7,034 per month or $84,413 per year to afford modest, comfortable living in the Nashville metro area. Here’s how that breaks down per month:
- Health care: $1,318
- Housing: $1,197
- Transportation: $1,191
- Child care: $1,166
- Food: $822
- Taxes: $609
- Other necessities: $731
You can see the EPI methodology here to make sure these estimates are relevant to you.
The Bureau of Labor Statistics tracks many metrics that also help you understand the cost of living in Nashville TN.
The Consumer Price Index (CPI) is the primary means of measuring inflation by measuring average price changes that consumers pay in a region for goods and services.
Nationwide, the CPI increased 0.6% in one recent month with consumer prices up 7.0% year-over-year. Nashville is in the South or Southeast region where consumer prices for urban consumers increased 7.4% overall. Food prices in the South increased 5.9% (6.3% nationwide) and energy costs increased 28.1% (29.3% nationwide).
You can also check the Consumer Expenditure Survey which shows average household expenditures. This is how much the typical Nashville household spent on major expenses:
- Housing: $19,029 ($21,409 national average)
- Transportation: $9,745 ($9,826 national average)
- Food: $6,477 ($7,316 national average)
- Insurance & pensions: $6,591 ($7,246 national average)
- Other items: $8,857 ($10,360 national average)
The Consumer Expenditure Survey shows households in the South don’t just spend less on necessary expenses, they also spend a lower share of their household income on most items. Here is the percentage of income spent on common items in the South vs the national average.
- Housing: 34.1% of income in the South vs 34.9% nationwide
- Property taxes: 3% in the South vs 3.8% nationwide
- Utilities & public services: 7.5% in the South vs 6.8% nationwide
- Natural gas: 0.4% in the South vs 0.7% nationwide
- Electricity: 3.1% in the South vs 2.5% nationwide
- Transportation: 17.5% in the South vs 16% nationwide
- Healthcare: 9.1% in the South vs 8.4% nationwide
- Food: 11.6% in the South vs 11.9% nationwide
How much does it cost to live in Nashville? The Nashville cost of living has been rapidly increasing over the last decade. In 2018, a study found you would need to earn $85,000 per year to live comfortably, $34,000 above the median income in the city. Nashville had the largest cost of living increase in the United States between 2016 and 2017.
Cost of Groceries, Food, Gas & Household Items in Nashville
Another good way to measure the Nashville cost of living is by comparing average prices to what you pay now. Here are typical expenses that help you understand the average cost of living in Nashville.
- Steak (1 lb ribeye): $13.73
- Milk (half-gallon): $2.09
- Eggs (one dozen): $1.14
- Potatoes (5-pound bag): $3.08
- Bread (one loaf): $3.63
- Frozen meal: $2.38
- Haircut: $20.02
- Movie ticket: $12.04
- Beer (6-pack Heineken): $9.71
Utilities are a big factor in your Nashville cost of living and account for 7.5% of the average household’s income. Here is an overview of the cost of Nashville utilities.
- Average cost for utilities in Nashville: $142.75
- Average electric bill in Nashville: $90.80
- Average natural gas bill: $51.95
Nashville Real Estate Market & Average Home Price in Nashville
Nashville recently ranked among the top 20 most overvalued metro areas. In 2021 alone, the Nashville housing market gained $52 billion in value, up $169 billion over a decade. According to one study, buyers are paying a 40% premium on Nashville home prices over the $281,000 average predicted price.
Nashville is a hot seller’s market with high demand and very low inventory. Across Middle Tennessee, median home prices increased over 22% in 2021 and prices are expected to increase between 6% and 20% in 2022.
The Nashville median home price is $395,000. That’s up almost 18% year-over-year with homes selling in 34 median days on market. The Nashville housing market is geared toward sellers now so you can’t count on getting list price. About 42% of homes are selling over asking price.
The most expensive Nashville housing market is the 37215 zip code with a median home price of $960,000. This includes the neighborhoods of Forest Hills and Green Hills.
Nashville Rental Market – Average Rent in Nashville
How much is rent in Nashville? The average Nashville rent is $1,644 according to RentCafe, a bit higher than the national average of $1,572.
In the most desirable and expensive neighborhoods, Nashville rent averages more than $2,200 per month. You’ll pay this much on average to live in neighborhoods like:
- The Gulch
- Downtown Nashville
- Midtown – Vanderbilt University
- Music Row
- Watkins Park
- Demonbreun Hill
- Elliston Place
- Marathon Village
- Tyne Meade
- Forest Hills
- Burton Valley
- West End Park
- Wedgewood – Houston
- 9th Avenue South
Looking for affordable places to live in Nashville? There are more than three dozen neighborhoods where average rent is under $1,300. Our guide to the Nashville crime rate is helpful for finding the safest places to live in the city where rent is still affordable.
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Household Income & Average Salary in Nashville TN
Is it expensive to live in Nashville? One way to answer this question is to look at the typical metro Nashville salary in comparison with typical living expenses.
The average salary in Nashville, TN is $65,000 per year or $19.46/hour according to Payscale with wages trending downward 0.2% and the cost of living dropping 3% in one recent quarter.
According to the BLS, the average weekly wage in Nashville is $1,194 compared to the U.S. average of $1,241. Average weekly wages are highest in Davidson, Williamson, and Maury counties and drop to $800 per week or lower in outer areas of the Nashville metro area.
The Nashville unemployment rate is 2.7% in the metro area, well below the national average of 3.7%.
Here is the average salary in Nashville for common occupations based on BLS data.
- General & operations managers: $59.95/hour vs $60.45/hour nationwide
- Musicians & singers: $36.24/hour vs $4172/hour nationwide
- Tractor-trailer truck drivers: $25.40/hour vs $23.42/hour nationwide
- Registered nurses: $32.75/hour vs $38.47/hour nationwide
- Bookkeeping & accounting: $21.53/hour vs $21.20/hour nationwide
- Retail salespersons: $14.62/hour vs $14.87/hour nationwide
According to the BLS, the average nurse salary in Nashville, TN is lower than the national average but many occupations earn close to or higher the U.S. average including truck drivers.
Income, Sales & Property Taxes in Nashville
Don’t overlook taxes when considering the cost of living in Nashville! Here’s an overview of the taxes you’ll pay so you can compare them to what you are paying now.
Nashville Property Tax
If you buy a home in Nashville, make sure you budget for Nashville property tax. Your tax rate is based on your home’s assessed value which is 25% of your appraised value.
There are two districts with a separate Davidson County TN property tax rate for FY 2022:
- Urban Services District tax rate: $3.288 per $100 of assessed value
- General Services District tax rate: $2.953 per $100 of assessed value
If your home is appraised at $400,000, it would be assessed at $100,000. This would result in a property tax bill of $2,953 in the General Services District or $3,288 in the Urban Services District.
Urban Services District residents receive additional services including trash pickup, sidewalks, and streetlights. Nashville USD neighborhoods include Downtown, Green Hills, North Nashville, East Nashville, Donelson, and Antioch.
Residents in the General Services District pay the general service district tax rate and the satellite city’s tax rate. Nashville GSD neighborhoods include Bellevue, Old Hickory, Hermitage, and most northern Davidson County areas.
Note: residents in Ridgetop, Goodlettsville, and Belle Meade have additional taxes not included in these property tax rates.
The 2020 Nashville property tax increase was one of the largest in Metro Nashville history with a 34% tax hike.
Nashville Sales Tax
What is the sales tax in Nashville, TN? The combined sales tax rate is 9.25%. That includes the 7% Tennessee sales tax and 2.25% sales tax for Davidson County. Tennessee has the highest average combined sales tax rate in the country. The 34% property tax hike went into effect in 2021.
Tennessee Income Tax
Tennessee has no income tax on wages. It’s one of nine states with no income taxes which helps reduce the cost of living in Nashville, Tennessee.
Nashville Cost of Living Comparison
How does the average cost of living in Nashville, TN compare to other major cities? Here’s a quick look at the Nashville, Tennessee cost of living compared to other Tennessee and Southeast cities.
|COLI||Avg Home Price||Avg Rent|
You can see that while the cost of living in Nashville TN is very affordable compared to most major metro areas, it’s far higher than other major cities in Tennessee. Why is Nashville so expensive? Nashville home prices and high Nashville rent alone contribute to most of the difference. Demand is high thanks to Nashville’s strong economy and job market.
There may be other cities where you can enjoy a lower Tennessee cost of living, but nothing compares to the Music City with its diverse job market and world-class entertainment and dining. Ready to relocate to Nashville and enjoy its below-average living costs? Give the best Nashville moving company a call to discuss your relocation and get a free, personalized moving estimate!