Buying a House in Tennessee A Guide for New Residents

Moving to Tennessee and thinking about buying a house in Tennessee? You’re not alone. Thanks to its low cost of living, scenic landscapes, and growing economy, Tennessee is quickly becoming a favorite destination for both first-time buyers and relocating families.

But before you take the plunge into homeownership, it’s important to understand what makes the Tennessee housing market unique.

In this guide, we’ll walk you through everything you need to know about buying a house in Tennessee from market trends to financing tips, legal steps, and the best places to buy.

Why Buy a House in Tennessee?

Tennessee stands out for several reasons:

• No state income tax (which can help with affordability)

• Diverse housing markets from mountain cabins to suburban developments

• Strong real estate appreciation in cities like Nashville, Chattanooga, and Knoxville

• Lower-than-average home prices compared to many other states

Whether you’re drawn by career opportunities or Tennessee’s outdoor lifestyle, purchasing property here can be a smart long-term investment.

Tennessee Real Estate Market Overview

Here’s what the current market looks like:

Note: Prices vary significantly by location homes in Nashville and Franklin will cost more than those in rural or eastern areas.

Best Places to Buy a Home in Tennessee

Here are some of the top cities and towns for homebuyers, based on affordability, growth, and livability:

1. Murfreesboro

• Family-friendly, excellent schools

• Close to Nashville without the high price tag

• Median home price: ~$365,000

2. Chattanooga

• Outdoor recreation and booming tech sector

• Growing job market

• Median home price: ~$295,000

3. Knoxville

• College town with stable economy

• Affordable and scenic

• Median home price: ~$280,000

4. Maryville

• Very low crime and great schools

• Ideal for families and retirees

• Median home price: ~$310,000

5. Spring Hill

• Suburban, clean, and high growth

• Part of the greater Nashville area

• Median home price: ~$420,000

Step-by-Step Guide to Buying a Home in Tennessee

1. Get Pre-Approved for a Mortgage

• Check your credit score

• Get quotes from local lenders or credit unions

• Determine your budget and debt-to-income ratio

2. Hire a Local Real Estate Agent

Tennessee is a non-disclosure state, so local knowledge is critical. A good agent can help you:

• Access local listings

• Navigate neighborhood trends

• Negotiate fair pricing

3. Start House Hunting

• Use sites like Zillow, Realtor.com, or local MLS feeds

• Be prepared to move quickly in competitive areas

4. Make an Offer

• Include contingencies (inspection, appraisal, financing)

• Be flexible with closing dates, especially in hot markets

5. Home Inspection & Appraisal

Tennessee law doesn’t require home inspections, but it’s highly recommended to avoid buying a property with hidden issues.

6. Close the Sale

• Sign documents

• Transfer funds and title

• Move in!

First-Time Homebuyer Programs in Tennessee

Tennessee offers a number of helpful programs through the Tennessee Housing Development Agency (THDA):

• Great Choice Home Loan: Low interest, 30-year fixed loans

• Down Payment Assistance (DPA): Up to $6,000 available

• Homeownership for Heroes: For military, teachers, EMTs, etc.

Eligibility depends on income limits, home price caps, and credit score (typically 640+).

What About Property Taxes?

Tennessee has some of the lowest property taxes in the U.S. the average effective rate is about 0.63%, compared to the national average of ~1.07%.

Legal & Local Considerations

• No state income tax but you will still pay federal income tax and local sales tax (up to 9.75%).

• Tennessee is a buyer beware state meaning it’s your responsibility to inspect the property thoroughly.

• Homeowner’s insurance is required with most mortgages and can vary widely by region.

Frequently Asked Questions

Q: Is now a good time to buy a house in Tennessee?

Yes, if you plan to stay for 5+ years. Interest rates have stabilized and appreciation continues in many markets.

Q: Can I buy a home in Tennessee as an out-of-state resident?

Absolutely. Many buyers work with local agents and lenders remotely before relocating.

Q: How much do I need to put down?

Anywhere from 3% to 20%, depending on the loan type. First-time buyer programs often require just 3–5%.

Q: What’s the average closing cost in Tennessee?

Expect to pay 2–5% of the purchase price in closing costs, which may include:

• Loan origination

• Appraisal

• Title insurance

• Recording fees

Final Thoughts: Buying a Home in Tennessee

Buying a house in Tennessee can be a smart move both financially and in terms of lifestyle. With its mix of affordability, no state income tax, and a range of vibrant cities and peaceful towns, Tennessee continues to attract new residents every year.

Do your research, connect with a local agent, and take advantage of the state’s buyer-friendly programs to make your move smooth and successful.