With no state income tax, strong job growth, a thriving music scene and a wide range of housing options, Tennessee could be seen as one of the best places to live in America. If you’re thinking about moving, you may be wondering about the average salary needed to buy a house in the state.
Median house prices tend to be reasonable but vary widely across the state. Personal finances and loan options also make a difference in buying a house in Tennessee. So, do you have the salary to buy a house in the Volunteer State? Let’s find out!
Markets in Tennessee
Tennessee has three urban markets and many smaller towns and cities to choose from. Home prices vary, and one of these markets is sure to be in your price range!
- Nashville and its suburbs have the highest prices in the state. The median list price in September 2025 was approximately $500,000. If you plan to buy a home in Nashville, Tennessee, or the surrounding area, expect higher prices and more competition.
- Memphis home prices are much more affordable, with median list prices of approximately $210,000. Memphis is a popular choice for first-time home buyers.
- Knoxville and Chattanooga are priced between Memphis and Nashville, with median house prices between $300,000 and $375,000, depending on the neighborhood.
- Smaller cities and towns and rural areas frequently have house prices below $200,000, but the trade-offs are longer commutes and fewer amenities.
So, what do you need to buy a house in Tennessee? It depends largely on the area you’re interested in and whether you’re willing to compromise on location.
Lender Requirements for Home Buyers
Whether you’re buying a house in Tennessee or elsewhere, financial institutions use several guidelines to determine how much house you can afford.
The 28/36 Rule
The 28/ 36 rule is an affordability guideline that lenders use to decide how much debt you can manage.
Under this rule, your monthly housing expenses (mortgage payments, property taxes, insurance, and HOA fees) shouldn’t exceed 28% of your gross monthly income, and your total debt obligations (housing expenses, car payments, student loans, credit cards, and other debts) shouldn’t exceed 36%.
Example of the 28/36 Rule
When figuring out how to buy a house in Tennessee, apply the 28/ 36 rule to see how much you can afford. The table below gives you the ballpark salaries necessary for buying a house in Tennessee at four different price points.
Assumptions: 20% down payment, $300 monthly for taxes and a 30-year fixed-rate mortgage at 6%.
Note that lenders only use the 28/36 rule as an indication of affordability. Actual approval for a loan requires additional information and documentation.
Using a “Salary Needed to Buy a House” Calculator
To get a better estimate, use a “salary needed to buy a house” calculator. A good calculator will ask for the home price, your down payment, the mortgage rate, the loan term, property taxes, insurance, HOA fees, your credit score, and all your monthly debts. Plug these numbers in and compare different scenarios for how to buy a house in Tennessee at different prices. That will give you a solid idea of what your budget is when you’re house hunting.
Financial Considerations Beyond Salary
Earning enough money is just one of the things you’ll need when buying a house in Tennessee. To get the best terms on your mortgage, your lender will also want to see:
- A sizable down payment: 15% is generally considered acceptable, but more is always better. Note that there are loan products that don’t require a down payment, including VA and USDA loans, and others that have low down payment requirements, such as FHA loans.
- A good credit score: over 620 for a conventional mortgage, but lower for FHA loans. A higher credit score can get you a lower rate, which will allow you to afford a more expensive home.
- Cash for closing costs: these are typically 2% to 5% of the home’s sale price.
- Cash reserves for the first few months of mortgage payments and for emergency expenses.
- A solid employment history of at least two years in the same field. If you’re self-employed, expect to provide more documentation.
Reviewing these requirements can be intimidating, but if you don’t have the salary to buy a house now, focus on these next steps:
- Improve your credit score by paying bills on time, minimizing credit card use, and avoiding new debt, such as additional credit cards or new loans.
- Reduce your monthly debt obligations by paying off loans and consolidating high-interest credit card debt.
- Increase your down payment.
- Look into loan programs such as FHA/ VA/ USDA loans if you’re eligible.
- Explore programs offered by the Tennessee Housing Development Agency (THDA), which offers affordable loan programs, down payment assistance, and educational resources to help first-time buyers who are thinking of buying a house in Tennessee.
- Think outside the box to areas outside your ideal city center. Work with a local real estate agent who knows the area well; they can often guide you to neighborhoods and communities you may not be aware of, where prices fit your budget.
With good planning, persistence, and a focus on buying a house in Tennessee, you can accomplish your goals. Many other homeowners have walked this path, and you can too.
Putting It All Together
So, how much salary do you need when buying a house in Tennessee? It depends on numerous factors, including the location of the home, your down payment, your loan type, and your other debt obligations.
The good news is that you can probably afford more home in Tennessee than in many other states due to the lack of state income tax, lower property taxes, lower cost of living, and the availability of TDHA programs for new homeowners. It’s a great place to live, work, and raise a family, so get planning and make your Tennessee dreams a reality!
