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The Best Cities in Tennessee for Homeownership

Tennessee is one of the most desirable places to live in the country, and for many good reasons. The state is famous for its musical roots, after all, not to mention drop-dead gorgeous scenery. It’s home to the Great Smoky Mountains National Park, which gets even more visitors each year than the Grand Canyon.

Tennessee is also a great place to live because home prices in many areas of the state are so affordable. Other things might attract homeowners to particular metro areas, too: short commute times may be important so that you can retain a high quality of life, and a low unemployment rate can help protect you in case you lose your job, for example.

Our researchers at LendingTree combed through these data points — and more — to create a list of the best places to own a home in the Volunteer State. We combed through the U.S. Census’ American Community Survey from 2013 to 2017, looking at data on metropolitan statistical areas (MSA) and micropolitan statistical areas in Tennessee. A micropolitan area has a population of 10,000 to 50,000 people.

For each area, we examined the median home value, unemployment rate, average commute time, median home value appreciation, and median change in yearly housing costs, which reflect the cost of homeownership.

Here are the results.

Key findings

  • The Nashville-Davidson–Murfreesboro–Franklin Metro Area is the best place for homeownership in Tennessee. It has the highest median home value ($200,400) and low unemployment (5%). The median home value saw substantial appreciation from 2013 to 2017 (14.71%), but the cost of homeownership stayed steady during the same time period (0.01%).
  • The second-best place for homeownership in Tennessee is the Knoxville Metro Area. This region also had a high median home value ($166,400), relatively low unemployment (6.1%), and decreasing homeownership costs (-0.22%).
  • The Lawrenceburg Micro Area is the worst place for homeownership in Tennessee. It has a low median home value ($111,100), high unemployment (8.8%), and long average commute time (27.7 minutes).

The best cities for homeownership in Tennessee

1. Nashville-Davidson–Murfreesboro–Franklin Metro Area

It might surprise you that we rated Tennessee’s capital city as the best place to own a home in the state. As you might expect, home prices here are relatively high — $200,400 is the median price, which makes it the most expensive of all the cities on this list — but stick with us.

The unemployment rate here is just 5%, which happens to be the lowest of all the cities on our list. There are plenty of high-paying employers in the area, which is a hotspot for many different industries, ranging from tourism to auto manufacturing. The costs to run a home (repairs, maintenance, utilities, etc.) remained unchanged from 2013 to 2017. Unfortunately, however, residents here do have a slightly longer commute than in other cities (27.3 minutes on average), likely due to the area’s sprawling nature.

2. Knoxville Metro Area

Tennessee’s third-largest city rolls in at number two on our list. Housing prices here are relatively high compared to other cities on our list (median value: $166,400), but that’s still a lot better than the rest of the United States (median value $193,500). Unfortunately for existing homeowners, home values here haven’t risen by that much. From 2013 to 2017, home values only rose by 5.9%.

However, just like Nashville, housing costs in Knoxville stayed pretty much constant over that same time frame. Knoxville residents also generally have a short commute to look forward to, given that the average commute is a brief 24 minutes.

3. Johnson City Metro Area

If you’re into outdoor recreation, you’ll love Johnson City. Not only is this town located along a stretch of the Appalachian Mountains, but it’s also close to several lakes and rivers for plenty of family fun. The median home price in this area is low ($144,500), although homes only appreciated in value by 5.47% between 2013 and 2017. Like the previous two cities on our list, homeownership costs stayed the same over the same time span. Major employers in Johnson City include East Tennessee State University and various health care companies. Unemployment in the area is a moderate 6%.

4. Chattanooga Metro Area

Chattanooga sits right on the border with Georgia, in the southern part of the state. Although the city center suffered urban decay for years, a revitalization effort has made it an attractive place to live now. There’s even a park with trails along much of the Tennessee River, which wanders through the city.

You can expect to pay a median amount of $159,800 for a home here. While home values haven’t risen that much over time (median appreciation was just 9.15% from 2013 to 2017), residents can appreciate quick commute times here — just 23.2 minutes on average.

5. Sevierville Micro Area

Sevierville lies even closer to Great Smoky Mountains National Park than Knoxville does. Residents here can also look forward to water recreation opportunities on the nearby sprawling Douglas Lake. It’s likely that home prices are driven up by this beautiful location (Dollywood is even located in Pigeon Forge, a Sevierville suburb). The median home value here is $168,000 — the second-highest price tag on our list. Like many of the other cities on this list, however, home prices here have barely changed at all in recent years. From 2013 to 2017, homes appreciated by just 1.14% in value, meaning you may not be able to count on a big spike in equity from rising appreciation values like you could in some other parts of the country.

6. Tullahoma-Manchester Micro Area

Situated halfway between Nashville and Chattanooga, the Tullahoma-Manchester area is a hub of the aviation and aerospace industry. Homes here are very reasonably priced — the median home price is just $128,000, and while the area does have a moderate unemployment rate (6.2%), residents enjoy a fast commute time (about 23 minutes on average). Home prices have also risen rather slowly compared to other parts of the country, with median home values rising just 12% from 2013 to 2017. Homeownership costs remained unchanged over that same time span.

7. Jackson Metro Area

All the way over in western Tennessee is our number seven pick, Jackson. It’s only about 85 miles from Memphis, which is close enough for day trips but far enough away that you can enjoy country living. Home prices here are also very affordable, with a median value of just $126,500. Compared to the other cities on our list, home values in Jackson have appreciated by a lot (11.65% from 2013 to 2017), making this is a great place for homeowners looking to take advantage of quick increases in equity.

Unemployment is also relatively high at 6.7%. However, many businesses are moving into the area, which may bring this rate down and increase job opportunities.

8. Clarksville Metro Area

If you’re looking for easy access to Kentucky while still remaining south of the border, Clarksville may be a great place for you. It straddles the two state lines and offers easy access to Fort Campbell, to boot. Unfortunately, unemployment is relatively high here at 7.7%. However, if you’re willing to make the 50-mile drive, nearby Nashville offers another place to find jobs for those looking.

The median home value in Clarksville is $152,200. Home values have increased a bit over time, by about 11% between 2013 and 2017. But all the fun costs associated with homeownership (taxes, repairs, utilities, etc.) basically remained unchanged over that same period.

9. Dyersburg Micro Area

Our ninth pick, Dyersburg, sits just a few miles from the meeting place of the Arkansas–Missouri–Tennessee borders. It’s also only a few dozen miles northwest of Jackson, our number seven pick. This town boasts the cheapest home prices of any of the cities on our list, with a median value of just $111,200. That’s even less than a 20% down payment for a home in expensive western real estate markets such as San Francisco. Dyersburg residents also enjoy fast 20.2 minute commute times and housing costs that have actually decreased by 2.17% in recent years.

10. Crossville Micro Area

Crossville completes a trifecta of cities ending in -ville: it sits about halfway between Nashville and Knoxville. This town bills itself as the “Golf Capital of Tennessee” and is home to nine golf courses. Home prices are also attractive here, with a median value of $146,800.

But what knocks this city further down the list is that it’s the only one where prices have actually gone down in recent years — i.e., homes have depreciated rather than appreciated. From 2013 to 2017, home values fell by 1%. That’s not good news for homeowners in the area. During that same time frame, however, miscellaneous homeownership costs also fell — by 3.33%. Unfortunately for Crossville, the area does have a relatively high unemployment rate (8%).

Homebuying tips for Tennessee

If you’re looking to move into one of these areas, you can take comfort in the fact that Tennessee doesn’t have the small footprint and hordes of well-paid masses buzzing around to drive up home prices like many other areas of the country. Still, home prices have been going up. According to data from the Tennessee RealtorsⓇ, home prices across Tennessee rose by 8% from January 2018 to January 2019 alone. Part of the reason undoubtedly has to do with how many homes there are on the market, as the number of single-family homes for sale dropped by about 10% over that same time span.

This might put even more pressure on you to buy a home immediately, especially if you’ve been thinking about doing it soon. But it’s important to keep a clear head, especially since this will likely be one of the biggest purchases of your life.

First, it’s wise to save up as much money as you can for a down payment. You may be able to qualify for a low (or even a no) down payment loan through a government program like an FHA or VA loan. However, saving up the recommended 20% down payment gives you several advantages.

It’ll allow you to dodge pricey mortgage insurance that’s often required with a low down payment. A larger down payment also means you can take out a smaller loan, which means more reasonable monthly payments with less money lost to interest over time. You’ll also have more equity in the home right off the bat, which you can use to fund a home equity line of credit if needed.

Once you have a down payment saved up, it’s wise to shop around for mortgages so that you know you’re getting the best rate. Hiring a financial advisor can also be useful so that they can help you detail out a budget and decide how much house you can realistically afford, not just what the bank says you can.

For example, it’s common for homeowners to have such a large mortgage payment that they can’t easily afford other things, like saving for retirement or keeping up with home repairs. This is called being “house poor,” and it’s one scenario you don’t want to box yourself into.

It’s also wise to interview a range of real estate agents and pick the best one who will give you honest advice, not just steer you to the largest home for your budget because that’ll mean more cash in their pocket. It’s your future home after all, and by following these tips, you’ll make sure to get the best home for your family’s situation.

Methodology:

The methodology for this study was simple and straightforward.

1: Collect metropolitan statistical areas (“MSAs”) and micropolitan statistical area from the U.S. Census Bureau using 2017 population data.

2: Each MSA and micropolitan statistical area was ranked on a scale from 31 (Best) to 1 (Worst) for five different metrics. Those metrics are:

Median Home Value(31-Highest Value, 1-Lowest Value)

Unemployment Rate(31-Lowest Rate, 1-Highest Rate)

Average Commute Time(31-Shortest Time, 1-Longest Time)

Median Home Value Appreciation (2013-2017)(31-Greatest Appreciation, 1-Smallest Appreciation)

Median Change in Yearly Housing Costs (2013-2017)(31-Smallest Cost Change, 1-Greatest Positive Cost Change) – The formula for this metric is (((Monthly Housing Costs for 2017 *12)+(Real Estate Tax for 2017))/ ((Monthly Housing Costs for 2013 *12)+(Real Estate Tax for 2013))-1)

3: An average score was then calculated for each MSA based upon the scores they received for each metric.

4: The MSAs and micropolitan statistical area were then ranked on a scale of 1 (Best) to 31 (Worst) based on their average score.

5: All metrics were ranked equally.

Data:

All data were obtained from the U.S. Census Bureau. More information on where the data came from is provided below:

2017 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage — 2013-2017 American Community Survey 5-Year Estimates

2017 Unemployment Rate and Median Commute Time

  • Filtered for all MSAs
  • Then filter for Selected Economic Characteristics — 2013-2017 American Community Survey 5-Year Estimates

2013 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage — 2013-2017 American Community Survey 5-Year Estimates
 

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