Nashville used to be a genuine bargain. That era ended around 2015. Today it sits slightly above the national average for cost of living. It is not dramatically expensive by coastal standards, but it is no longer the affordable Southern city it was marketed as during the growth boom of the 2010s.
The Cost of Living Index
Depending on the source and measurement period, Nashville’s cost of living index runs between 96 and 105, against a national baseline of 100. That places it roughly 0–5% above the national average. It’s significantly cheaper than San Francisco (82% more expensive), New York (70% more), Boston (47% more), or Washington DC (39% more). It’s roughly comparable to Austin, slightly more expensive than Atlanta, and notably more expensive than most of Tennessee (the state averages around 87.6, well below national).
Housing Is the Core Issue
The most significant expense is housing. The median home price in Nashville is approximately $425,000–$455,000 (early 2026 data from Redfin and Zillow), slightly above the national median. That’s a dramatic change from 2015, when the median was under $250,000. Prices are down modestly year-over-year from their 2022 peak.
Rent is similarly elevated for a mid-size Southern city:
- Average 1-bedroom apartment: $1,400–$1,779/month (varies by neighborhood and source)
- Downtown or Gulch 1-bedroom: $2,200–$2,500+
- East Nashville, 12 South: $1,800–$2,200
- Further out (Donelson, Bellevue): $1,400–$1,700
About 42% of Nashville homes in recent markets sold above asking price. The competitive market that built during the growth years has eased somewhat from its 2021–2022 peak but hasn’t reversed.
The Tax Advantage That Softens the Blow
Tennessee has no state income tax. This is a genuine financial benefit that partially offsets higher housing costs for working residents. Someone earning $80,000 in Nashville takes home more than the same person earning $80,000 in California or New York, even before accounting for lower housing costs relative to those states.
The trade-off: Tennessee’s state and local combined sales tax rate in Nashville is 9.25–9.55%, among the highest in the country. Groceries, clothing, and most goods are taxed at this rate. If you spend significantly on taxable goods, this erodes the income tax advantage.
Day-to-Day Costs
Outside housing, Nashville is at or slightly above national averages:
- Groceries: roughly at the national average
- Healthcare: about 8% below national average (a significant benefit)
- Utilities: about 4% below national average
- Transportation: about 10% below national average (lower auto insurance, gas near $3.00–3.25/gallon)
- Dining out: rising, but still cheaper than comparable meals in coastal cities
A meal at a mid-range Nashville restaurant runs $15–25 per person. Hot chicken at Prince’s or Hattie B’s is $10–20. A Nashville-area gym membership is $30–60/month for most mainstream options.
The Honest Bottom Line
Nashville is affordable compared to New York, San Francisco, Boston, or DC. It is not particularly affordable compared to the Southeast as a whole or compared to what it was five years ago. The people who moved here in 2012 and paid $200,000 for a house are sitting on significant appreciation. The people moving here in 2025 are arriving at a market that has already priced in the growth story.
For someone earning a professional salary in healthcare, tech, or music industry roles, Nashville is financially reasonable. For someone earning a service sector wage or working as a musician or artist, Nashville has become genuinely difficult.
Sources
- RentCafe, Nashville rental market data, 2024
- Redfin, Nashville median home price, 2024–2025
- Council for Community and Economic Research, Cost of Living Index (COLI), 2024
- Tennessee Department of Revenue, sales tax rate schedule
- Bureau of Labor Statistics, Consumer Expenditure Survey
- Numbeo, Nashville cost of living comparison data