Nashville, TN Cost of Living (2026)

Nashville has a cost of living index of 105, just 5% above the national average. It remains one of the more affordable major Sun Belt cities despite significant growth over the past decade. The housing index is 120, reflecting the price increases that have come with population growth. A one-bedroom apartment in the city averages around $1,500 to $1,800 per month, and median home values have risen to approximately $400,000 after years of rapid appreciation. The median household income sits around $65,000.

A $100,000 salary in an average-cost city is worth about $95,000 in Nashville. That near-parity means most salary earners lose very little purchasing power in this market. Workers coming from high-cost metros like Seattle or Boston will find that the same gross salary goes considerably further here, particularly on housing.

Tennessee has no state income tax on wages. The state previously taxed investment income through the Hall income tax, but that was eliminated in 2021. Residents pay no state tax on salaries, which provides a meaningful boost to take-home pay relative to states with 5 to 10% income taxes. Sales tax in Tennessee is high, with the combined state and local rate often reaching 9.5 to 10%, so frequent retail and grocery purchases do add up.

Nashville's growth has pressured the housing market meaningfully since 2020. Neighborhoods that were affordable five years ago have seen rent increases of 30 to 50%. Areas like East Nashville, Germantown, and 12 South now carry rents that feel more like a mid-tier coastal city than a traditional Southern market. Workers who prioritize housing affordability are increasingly looking at suburbs like Hendersonville, Murfreesboro, and Smyrna, which offer lower housing costs with a longer commute.