How to buy a house in Tennessee

Tennessee has a lot to offer aspiring home buyers. With a growing supply of homes for sale and median prices well below the national average, buying a home in Tennessee is appealing to many aspiring homeowners.

Of course, that doesn’t mean it’s a walk in the woods to buy the perfect home in Tennessee. Navigating any housing market takes knowledge, research, and wisdom. So let’s dive into the details of the Tennessee real estate market that you’ll need to buy a home in Tennessee.

A quick look at Tennessee’s housing market

The housing market in Tennessee is growing but still relatively affordable. Here's a snapshot of the Tennessee housing market, as of September 2025.

Tennessee real estate trends

Tennessee’s real estate market is defined by affordability, growth in many areas, and a steady flow of people looking to move to the state. It was among the top five states home buyers researched moving to, according to Redfin.

Home prices

Tennessee’s median home price as of September 2025 is $394,200. That’s nearly 10% below the national median price of $435,495. Tennessee home prices have been trending upward, increasing 2.4% over the past year. The average mortgage payment in Tennessee for 2025 is $1,958, based on the average home purchase price for a fixed-rate 30-year loan and an interest rate of 6.68%, as of August 2025.

Of course, many factors contribute to whether properties enjoy this success. Here are a few key ones.

• Location: Metro hubs like Nashville have higher median prices than the state’s average. Lower home prices are more common in rural communities.
• Property characteristics: New construction, larger lots, and updated amenities drive higher prices, while older or smaller homes may be more budget-friendly.
• Construction and land costs: Higher costs for labor and materials have increased new-home prices.
• Local regulations: Tennessee has restrictions, such as single-family zoning, that have pushed housing costs higher in the past five years.

Before you begin your search for Tennessee real estate, use this home affordability calculator from Rocket Mortgage to estimate how much house you can afford.

Housing demand vs. inventory

Here are some of the main reasons Tennessee appeals to home buyers.

• A strong job market. Nashville is home to a significant number of health care companies. Tennessee’s unemployment rate of 3.6%, as of July 2025, is below the national average.
• Cultural and recreational appeal. Tennessee is home to the musical legacy of Memphis and Nashville, while Chattanooga offers an outdoor lifestyle.
• Low cost of living. Tennessee is relatively affordable. The cost of living is about 10% below the national average.
• Tax perks. Tennessee has no state income tax and relatively low property taxes.  

Job growth, tourism, and rising home values have made Nashville a growing market. Similarly, Chattanooga and Knoxville have grown thanks to tech and tourism.

The good news for home buyers is that housing market indicators point to less competition. Statewide inventory has increased in Tennessee more than the national average. Redfin reported a 15% increase in homes for sale year-over-year compared with the national average of 8.6%.

Home buying seasons

In Tennessee, the best time of year to buy a house is spring or summer. This is when you’ll see the most inventory, but also the most competition from other buyers. If your schedule demands it, or you want the most choice, this might be the best time for you to shop for a home.

If your priorities are to find a bargain and have maximum negotiating power, then winter might be a better bet, however. This is when inventory is lowest due to the less-favorable weather, but sellers may be more motivated, and there is less competition. Fall sees similar conditions.

Top cities to buy a home in Tennessee

If you're deciding where to live in Tennessee, here are the top cities in the state to consider.

Nashville

Nashville’s music scene is iconic, but the city also has strong job opportunities in the health care and tech sectors. Nashville also has attractive family-friendly suburbs such as Franklin, Hendersonville, and Brentwood.

• Population: 704,963
• Median household income: $75,200
• Median home price: $460,000

Memphis

Memphis has some of the most affordable housing when it comes to Tennessee metros. It also has a rich cultural history and a laid-back atmosphere, which add to the attraction for first-time home buyers. Beautiful Mississippi River views and a strong community spirit add to the city’s appeal.

• Population: 610,919
• Median household income: $51,200
• Median home price: $185,000

Knoxville

Knoxville, home to the University of Tennessee, attracts students, young professionals, and families who gravitate to the city’s youthful energy and proximity to the Smoky Mountains.

• Population: 198,722
• Median household income: $57,298
• Median home price: $320,450

Chattanooga

Chattanooga offers outdoor beauty, arts and culture, and walkability. It's also a destination for startups and innovation. Housing is affordable compared to Nashville, but prices are rising. Suburbs like Signal Mountain and Lookout Mountain offer family-friendly neighborhoods.

• Population: 191,496
• Median household income: $66,060
• Median home price: $346,000

Clarksville

Clarksville is a growing city and, with its proximity to Fort Campbell, is popular among military families. It has a young population, plenty of affordable housing, and enjoys proximity to Nashville.

• Population: 185,690
• Median household income: $73,465
• Median home price: $300,900

Murfreesboro

Southeast of Nashville, Murfreesboro has grown rapidly in recent years. Home prices increased more than 10% over the last year. The city has a family-friendly vibe, desirable schools, and plenty of suburban amenities. For nearby alternatives, check out Smyrna and La Vergne.

• Population: 168,387
• Median household income: $84,457
• Median home price: $435,000

Steps for buying a house in Tennessee

Here are the steps to buying a house in the Volunteer State.

1. Prepare your finances

The first step in the house hunting process involves preparing your finances and assessing your creditworthiness. You want to make sure that your credit is good, and you have enough money for a down payment and closing costs.

• Review your budget and check the affordability of mortgages in various areas of Tennessee using the free mortgage calculator from Rocket Mortgage.
• Check your credit score.
• Figure out your debt-to-income ratio (DTI).
• Save for a down payment.
• Plan for closing costs.

2. Explore home loan programs

When buying a home in Tennessee, you have a variety of mortgage types to choose from.

• Conforming conventional loans. These are offered by private lenders and require a credit score of at least 620 and a down payment of at least 3%. You'll have to pay for private mortgage insurance if your down payment is less than 20% of the purchase price.
• FHA loans. This is a government-backed loan from the Federal Housing Administration that often comes with lower credit score requirements, depending on how much of a down payment you can make.
• VA loans. These loans backed by the Department of Veterans Affairs are available only to military personnel, veterans, and their surviving spouses. They require no down payment and usually provide competitive mortgage rates and fees.
• USDA loans. These are loans backed by the U.S. Department of Agriculture. USDA loans are offered to low- to mid-income borrowers buying a qualified home in specific rural areas. They carry many restrictions and no down payment requirement.
• Jumbo loans. These conventional loans are for amounts exceeding the conforming loan limits. Lenders are free to set their own requirements and often require a higher credit score and a larger down payment.

You also might qualify for assistance from the Tennessee Housing Development Agency. They offer special loan programs and down payment assistance for buyers who qualify. If you're a first-time buyer, you should explore their options and see if you qualify.

3. Get mortgage preapproval

It’s a great idea to mortgage preapproval before shopping for homes. Preapproval gives you an idea of how much you can borrow and what your mortgage rate will be.

Preapproval can make you a more competitive buyer, especially in competitive markets. It shows sellers that you can get financing to buy a home.

To get preapproved, you’ll share documentation, such as proof of employment and income, with a lender. They’ll check your credit and preapprove you for a specific loan amount. The entire process typically only takes a few days.

4. Find a Tennessee real estate agent

Understanding the local market is important when buying a home. A good real estate agent has experience with buying and selling in the area. To find a good agent, start by asking for referrals and checking recent sales in the neighborhood you’re considering. You also can search online, using a site such as Redfin.com, to find a real estate agent.

Tennessee allows dual agency, which means one agent can represent both the seller and the buyer in a transaction. The agent must disclose this to both sides. If this comes up, make sure you’re comfortable with it.

5. Start shopping for homes

Start your search through online sites like Redfin and consult the multiple listing service with your real estate agent.

Once you’ve learned about various neighborhoods and have some prospects that meet your family’s needs, attend open houses to get an up-close look at the market offerings.

When shopping for properties, consider factors such as:

• Education and job opportunities
• Local amenities like shopping, medical services, recreation, and roads
• Homeowners association fees and rules
• Commute times
• Property taxes

6. Make an offer and negotiate

When it’s time to make an offer, your agent will walk you through the process.

In Tennessee, the Tennessee Residential Property Disclosure Act demands that sellers disclose any material defects. And while the law doesn’t require you to have a real estate attorney, make sure you have a professional, such as your real estate agent, look over all paperwork.

Once your offer is accepted, you may need to put up earnest money. This is a deposit showing that you’re serious about buying the property. If you buy the home, this money goes toward your down payment.

You’ll also want to have a home inspection and appraisal, along with a contingency in the contract, so if there are any significant problems and you’re forced to back out of the deal, you’ll get your deposit back.

7. Close on your new Tennessee house

You’ll formally qualify for your mortgage, secure homeowners insurance, get title searches done, and pay closing costs. In Tennessee, these can range from 3% – 6% of the purchase price. Closing costs typically include loan origination fees, points, title insurance, escrow fees, recording fees, possibly property taxes, insurance, and some inspections.

FAQ

Here are answers to common questions about buying a home in Tennessee. This guide is not a replacement for legal or financial advice and should not be seen as such.

Is buying a home in Tennessee a good investment?

Tennessee’s affordability, lack of personal income tax, and steady population growth make buying a home in the state an attractive investment.

Can I buy a house in Tennessee if I have bad credit?

Yes. Government-backed loan programs such as FHA loans may help. However, with a lower credit score, you may be subject to higher rates and limited options.

How much are property taxes in Tennessee?

Property taxes vary by local jurisdiction. However, on average, Tennessee property taxes are low, about 0.58%.

How long does it take to buy a house in Tennessee?

Expect it to take about 30 to 60 days once your offer is accepted. Home inspections and loan approval can impact the timeline.

The bottom line: Find your new home in the Volunteer State

Home prices in Tennessee are more affordable than in most other parts of the nation; however, in many metro areas, this has led to increased competition. By working with a trusted real estate agent and preparing your finances, you can buy a home in Tennessee. Tennessee offers ample opportunity when it comes to careers, culture, and outdoor activities. It also has no personal income tax and a growing population.

If you’re ready to start your next adventure in the Volunteer State, apply for a mortgage with Rocket Mortgage.