The 10 Cheapest Places to Live in Tennessee in 2026
October 09, 2026
Add AD Mortgage as your preferred source on Google
This article was originally published on February 25, 2025, and updated in October 2026.
Tennessee is still one of the easier states in the South to own a home in, but the margin is getting thinner. The statewide median sale price reached $378,325 in August 2026, according to Redfin, and the 30-year fixed rate averaged 7.40% in the week of October 8, according to Freddie Mac. The Tennessee Housing Development Agency puts the long-run squeeze in plain numbers: from 2015 to 2024, the state’s median household income rose 52% while the median sales price rose 200%, and only 32% of homes sold in 2024 were affordable to a median-income household, down from 71% in 2019 (THDA).
That is why this list does not rank cities on price alone. A $160,000 house is only “cheap” if the people who live nearby can carry the payment. We compared each city’s median sale price with its local median household income and ranked the results by the gap between the income a buyer would need and the income households there actually earn. Every city on this list has a median price far below the statewide figure, and in the No. 1 city, the typical household already earns more than the payment requires.
Methodology
To identify the most affordable places to buy a home in Tennessee, we compared median home sale prices with median household incomes. We used the latest available three-month median sale prices from Redfin (see the data periods below the table) and median household incomes from the U.S. Census Bureau’s American Community Survey 2020–2024 five-year estimates, reported through Census QuickFacts or Data USA.
For each city, we estimated a monthly housing payment assuming a 20% down payment and a 30-year fixed mortgage at 7.40%, the Freddie Mac average for the week of October 8, 2026. The payment includes principal, interest, estimated property taxes based on county effective tax rates and homeowners insurance estimated from Insurance.com’s Tennessee average. We then calculated the gross household income needed to keep that payment at 28% of income, a common housing-ratio guideline.
The income gap is the difference between that required income and the local median household income. Cities are ranked by the smallest gap, so the top spots go to places where local incomes come closest to covering, or already cover, the cost of a typical home. The separate price rank shows where each city falls by median sale price alone. We included incorporated cities and towns with enough recent sales to produce a reliable median. The estimates exclude PMI, HOA fees, utilities, maintenance and closing costs.
Home Prices vs. Local Incomes in Tennessee’s 10 Most Affordable Cities
Home Prices vs. Local Incomes in Tennessee’s 10 Most Affordable Cities
Data periods. Data compiled October 9, 2026. Median sale prices cover the three months ending June 2026 for Dyersburg, Covington and Bristol; July 2026 for Union City and Milan; and August 2026 for the remaining cities.
Financing assumptions. Calculations assume a 20% down payment, a 30-year fixed mortgage and a 7.40% interest rate. All payment and income requirements are estimates.
¹ Estimated monthly payment. Principal, interest, estimated property taxes and homeowners insurance. Tax estimates use county effective property-tax rates ranging from 0.37% to 0.98%. Insurance is estimated at 1.066% of the purchase price annually, based on Insurance.com’s Tennessee average. Actual taxes and premiums vary by property. PMI, HOA fees, maintenance, utilities and closing costs are excluded.
² Required annual income. Gross household income needed to keep the estimated monthly payment at 28% of income, calculated as monthly payment × 12 ÷ 0.28. Calculations use unrounded figures.
³ Local median household income. U.S. Census Bureau ACS 2020–2024 five-year estimates, reported through Census QuickFacts or Data USA. These are historical estimates, rather than measurements of 2026 earnings.
⁴ Income gap. Required annual income minus local median household income. A negative figure indicates an income cushion; a positive figure indicates a shortfall. Cities are ranked by this gap, smallest first. The ranking compares estimated homebuying affordability among the cities screened; it does not measure total living costs or guarantee mortgage eligibility.
What Makes These Tennessee Cities Affordable in 2026
Home prices well below the state median
All ten cities sit between $157,164 and $264,756, compared with a statewide median of $378,325. Deed records tell the same story: in 2025, Obion County (Union City) had a median sale price of $159,200, Weakley County (Martin) $174,500 and Dyer County (Dyersburg) $174,950, versus $360,000 statewide. Seven of the ten cities are in West Tennessee, the cheapest corner of the state.
No state income tax and modest property taxes
Tennessee does not tax wages, and its Hall tax on interest and dividends was repealed for tax periods beginning January 1, 2021. County effective property-tax rates for the cities on this list run from 0.37% in Campbell County (La Follette) to 0.98% in Shelby County (Memphis) (TaxByCounty). Homeowners who are 65 or older or disabled, with 2025 income up to $38,470, can qualify for state property-tax relief, as can qualifying disabled veterans.
A steady job market
Tennessee’s unemployment rate was 3.4% in August 2026, below the national 4.1%, and employers added 16,400 jobs over the year. Several towns on this list are anchored by large food, manufacturing or university employers, which we cover city by city below.
Buyers have more leverage than they did
Tennessee had 64,377 homes for sale in August 2026, up 38.0% from a year earlier, roughly five months of supply, and only 14.3% of homes sold above list price. More inventory means more room to negotiate on price, repairs and seller concessions.
Owning can beat renting
Tennessee’s 2026 two-bedroom Fair Market Rent averages $1,363 a month statewide (NLIHC). Our estimated ownership payment is lower than that in Dyersburg and roughly equal to it in Memphis, Martin and Covington.
The trade-offs to plan for
Lower prices often come with older housing. THDA reports that about 44% of vacant housing units in the Jackson region are substandard, the highest share in Tennessee, and insurance premiums are rising faster than prices in many markets. A full inspection and an early insurance quote matter more in these towns than in newer suburbs.
1. Dyersburg: The Only City Where Local Incomes Beat the Payment
Dyersburg is the only city on this list where the typical household earns more than a median-priced home requires, and it also has the lowest median price in the top 10.
Dyer County posted a 3.3% unemployment rate in July 2026, the lowest among the counties behind this ranking. Dyersburg State Community College is headquartered here on a campus of more than 115 acres and serves a seven-county area, which gives residents a local path into nursing, technical and transfer programs.
What borrowers should know
Affordability. The estimated $1,093 payment is below Tennessee’s statewide two-bedroom Fair Market Rent of $1,363 (NLIHC), so for many renters buying is the cheaper monthly option.
Cash needed. At the median price, 3.5% down on an FHA loan is about $5,500, and THDA’s Great Choice Plus can cover up to 5% of the price, about $7,860 here, as a second mortgage.
Low tax drag. Dyer County’s effective property tax rate is about 0.63%, or roughly $83 a month on a median-priced home.
Timing. The median reflects the three months ending June 2026 and was down 16.8% from a year earlier (Redfin).
THDA lists Dyersburg among the areas with minimal or no housing shortage, so price gains are likely to stay moderate. That supports long-term affordability messaging, but appraisal comps can be thin; build in time.
Steady manufacturing payrolls mean many W-2 borrowers with overtime and shift differentials. Document two-year history early.
Memphis is the only large city in the top 10. Its median price is about half the statewide median of $378,325 (Redfin), and its income gap is the second smallest on the list.
Memphis offers what no other city here can: a major-metro job base, a deep rental market and big-city amenities. Shelby Farms Park covers 4,500 acres, with more than 40 miles of trails, more than 20 bodies of water and the 10.65-mile Shelby Farms Greenline connecting Memphis and Cordova. The region is also attracting new kinds of investment: xAI bought 1 million square feet of property in Southwest Memphis in 2025 to expand its Colossus supercomputer site, and the report said Nvidia, Dell and Supermicro also plan Memphis operations (WMC Action News 5).
Fewer than half of Memphis homes are owner-occupied (44.9%, per Census QuickFacts), and THDA reports that Shelby County’s median sales price fell 7% from 2023 to 2024, the only major decline it noted statewide. For buyers, that means room to negotiate; Redfin’s data shows homes selling for about 96% of list price.
What borrowers should know
Local down payment help. The City of Memphis runs several down payment assistance programs, including citywide assistance for households at or below 80% of area median income, a program for buyers up to 200% of AMI in 15 targeted areas, and programs for police officers, firefighters and Memphis-Shelby County Schools employees without income limits (City of Memphis).
Property taxes are higher here. Memphis homeowners pay both city and Shelby County property taxes, and residential property is assessed at 25% of appraised value. Shelby County’s effective rate of about 0.98% is the highest on this list; for FY2026, the county mayor proposed a county rate of $2.69 per $100 of assessed value. Budget about $153 a month for taxes on a median-priced home.
Neighborhood matters. Prices, insurance and condition vary widely by ZIP code. Get an insurance quote before you go under contract.
What brokers should know
Memphis is the deepest investor market on this list. A renter-majority city with sub-$200,000 entry prices is a natural fit for DSCR loans, which qualify on property cash flow with a 620 minimum FICO and up to 80% CLTV, with no personal income or employment documentation required.
Gig workers, logistics contractors and small-business owners are common here; bank statement loans using 12 or 24 months of personal or business statements (up to 90% CLTV) can qualify borrowers that tax returns undercount.
Pair FHA or conventional financing with city DPA programs for first-time buyers, and confirm program stacking rules with the city before locking.
3. Humboldt: Strawberry Country With a Hot Little Market
Humboldt finishes close behind Memphis. Its local median household income is the second highest in the top 10, behind only Bristol, which keeps its gap small even though its price ranks only fifth.
This Gibson County town is best known for the West Tennessee Strawberry Festival, held every May since 1934 (Humboldt Chamber of Commerce). Its economy got a major boost when Tyson Foods chose the 500-acre Gibson County Industrial Park in Humboldt, along Highway 45, for a plant with potential for 1,500 jobs; the state put about $31.5 million into infrastructure grants for the site (TNECD).
Humboldt skews older: 25.2% of residents are 65 or older, and 54.8% of homes are owner-occupied (Census QuickFacts). The market is competitive for its size. The median price rose 47.4% year over year on just 26 sales, and 23.1% of homes sold above list price. With so few sales, a handful of higher-end homes can move the median sharply.
What borrowers should know
Expect competition on the best listings. With about a quarter of homes selling over asking, get fully pre-approved before you shop.
Inspect carefully.THDA reports that about 44% of vacant housing units in the Jackson region are substandard. A thorough inspection protects you on older homes.
Older people and veterans. Tennessee’s property tax relief program covers homeowners 65 or older or disabled with 2025 income up to $38,470, plus qualifying disabled veterans (Tennessee Comptroller).
What brokers should know
Plant workers at Tyson and nearby employers make Humboldt a strong FHA and HomeReady market; pair with THDA’s Great Choice Plus, which covers up to 5% of the price (about $9,950 at the median).
For veterans, VA financing with no down payment and a 580 minimum FICO removes the biggest hurdle in a market where homes move fast.
Older retirees downsizing or buying near family may have strong assets but limited income; consider whether asset-based or bank statement documentation (Non-QM) better reflects their finances.
4. Union City: Lakes, Museums and Food-Processing Jobs
Union City pairs a median price just above $200,000 with local incomes close to those of the West Tennessee cities ranked above it.
The Obion County seat punches above its size on attractions. Discovery Park of America, which opened in 2013, is a 50-acre museum and heritage park with more than 70,000 square feet of exhibits, 10 galleries and a 20,000-gallon aquarium. Reelfoot Lake, created by the New Madrid earthquakes of 1811–1812, lies in Obion and Lake counties; the state natural area covers about 18,000 acres and draws wintering bald eagles.
Food processing is the economic anchor. Tyson Foods announced an $80 million expansion of its Union City operations in 2017 with more than 300 new jobs. Obion County had the lowest 2025 median sale price among the counties in this ranking, at $159,200 (THDA), and its unemployment rate was 3.7% in July 2026 (Tennessee Department of Labor).
What borrowers should know
Read the price trend carefully. The city’s median rose 33.7% year over year, but on only 23 sales in the latest month, and the data runs through July 2026 (Redfin). The countywide median is lower, so compare city and county listings.
Low tax bill. Obion County’s effective property tax rate is about 0.52% (TaxByCounty), roughly $91 a month on a median-priced home.
Down payment help. On a $209,895 home, THDA’s 5% option would cover about $10,500.
What brokers should know
Many borrowers here are hourly plant employees; FHA and Conventional Standard with 3% down are the core products.
Farm owners and agricultural contractors in Obion County often show low taxable income after depreciation. Bank statement loans can qualify them on deposits instead of tax returns.
Lakefront and hunting properties around Reelfoot attract second-home buyers and investors; DSCR is an option for rental properties that cash-flow.
5. Martin: A University Town With Renter-Market Economics
Martin has the fourth-lowest price on the list but ranks fifth because local incomes are lower, partly because students make up a large share of residents.
The city is home to the University of Tennessee at Martin, which enrolled 8,101 students in fall 2025, up 7.9% from the year before and tied for the second-highest enrollment in school history. Its first-year class of 1,329 was the largest in 15 years. Because students make up a large share of the population, the city’s median household income understates what working families and university staff earn.
Community life revolves around the campus and the town’s agricultural roots. The Grassroots Soybean Festival ran September 8–12, 2026, with the Tennessee Department of Agriculture as title sponsor and UT Martin’s agriculture department providing educational programming. Weakley County’s unemployment rate was 5.3% in July 2026, the highest among the counties in this ranking.
What borrowers should know
A buyer-friendly market. The median price fell 17.9% from a year earlier, and homes sold in a median 26 days (Redfin).
One of the lowest tax rates on the list. Weakley County’s effective property tax rate is about 0.48% (TaxByCounty), roughly $80 a month on a median-priced home.
Parents buying for students. Some families buy a home near campus instead of paying four years of rent. Talk with a loan officer about occupancy rules before you choose a loan type.
What brokers should know
Only 42.4% of Martin homes are owner-occupied (Census QuickFacts), making it a natural student-rental market. DSCR loans qualify on rental cash flow, allow first-time buyers and require no income or employment documentation.
University faculty and staff are steady W-2 borrowers for conventional and FHA loans; newly hired staff relocating to Martin may be first-time buyers eligible for THDA assistance.
Self-employed farmers in Weakley County are a fit for bank statement.
6. Covington: A Quiet Memphis Alternative With Half the Tax Rate
Covington has the third-lowest median price on the list, but local incomes are among the lowest, which moves it down to sixth.
The Tipton County seat sits north of Memphis, about 40 minutes from Memphis International Airport (City of Covington). It has its own hospital, Baptist Memorial Hospital-Tipton, with 100 beds and about 300 employees, along with a Tennessee College of Applied Technology campus and Dyersburg State Community College’s Jimmy Naifeh Center. Local life centers on Court Square and a park system led by Cobb-Parr Memorial Park, home of the fall Tipton County Bar-B-Que Festival.
The biggest economic question nearby is BlueOval City in neighboring Haywood County. The $5.6 billion site carries a 5,800-job commitment, but five years after its announcement it employs only about 80 Ford workers and about 100 at SK On. Ford now plans to build gas-powered trucks there starting in 2029, and SK On plans to begin battery production in 2028.
What borrowers should know
Lower taxes than Memphis. Tipton County’s effective property tax rate is about 0.50%, about half of Shelby County’s 0.98% (TaxByCounty). On a median-priced home, that is about $82 a month in Covington versus about $153 in Memphis.
Thin sales data. Only 12 homes sold in June 2026, and the median covers the three months ending in June (Redfin). Ask for fresh comps.
Down payment help.THDA’s 5% option would cover about $9,900 at the median price (THDA).
What brokers should know
Covington is a commuter market for Memphis-area workers who want lower taxes and a small-town setting. FHA, VA and HomeReady fit most buyers.
Watch BlueOval City’s hiring timeline. If truck production starts on schedule in 2029, demand from new hires could reach Tipton County; positioning with local agents now builds relationships before that wave.
Fewer than half of Covington homes are owner-occupied (45.3%, per Census QuickFacts), which supports DSCR investor lending alongside owner-occupied loans.
7. Bristol: The Tennessee Side of a Two-State City
Bristol has both the highest median price and the highest local median income in the top 10.
The city straddles the Tennessee–Virginia line, which runs down State Street downtown. That matters for household budgets: Tennessee does not tax wages, while Virginia’s income tax reaches 5.75% on taxable income above $17,000 (NerdWallet). For a household earning Bristol’s median income, living on the Tennessee side can mean roughly a couple of thousand dollars a year less in state income tax, depending on deductions.
The city’s identity is built on music and racing. The Birthplace of Country Music Museum, a Smithsonian affiliate downtown, tells the story of the 1927 Bristol Sessions, often called the “big bang” of country music, and runs Radio Bristol and the Bristol Rhythm & Roots Reunion festival. Bristol Motor Speedway, on the Tennessee side, hosted the MLB Speedway Classic in August 2025, which drew 91,032 fans, a record for a single MLB game. Sullivan County’s unemployment rate was 3.5% in July 2026.
What borrowers should know
Older homes. In the Kingsport region, which includes Bristol, nearly half of occupied homes were built before 1980 and mobile homes make up 15% of the housing stock (THDA). Budget for updates, and check roof and system ages before you bid.
Highest homeownership on the list. 4% of Bristol homes are owner-occupied (Census QuickFacts), which points to stable, established neighborhoods.
Down payment help. At $264,756, THDA’s 5% option would cover about $13,200. The data is through June 2026, and prices were down 7.1% year over year (Redfin).
What brokers should know
Cross-border buyers are the opportunity. Virginia-side renters and homeowners who work in either state can cut their tax bill by buying in Tennessee, which is an easy story to tell in referral conversations.
Race weekends and festival traffic support short-term and mid-term rental interest; DSCR qualifies on property cash flow. Confirm rental-type eligibility with your AD Mortgage account executive.
Homeowners with equity in older properties may want to renovate without giving up a low first-mortgage rate; a second mortgage (up to 90% CLTV) is worth discussing.
8. Milan: An Arsenal Town Writing Its Next Chapter
Milan’s prices sit in the middle of this list, but local incomes trail, leaving a gap of more than $23,000.
For more than 80 years, Milan was defined by the Milan Army Ammunition Plant, established in 1941, which had a peak workforce of 11,000. Production moved to Iowa in 2013, and the Army formally deactivated the plant on April 10, 2025. More than 16,000 acres were transferred in 2022 to the Tennessee National Guard, whose training site now exceeds 18,500 acres.
Milan is also a name farmers across the country know. The University of Tennessee’s AgResearch and Education Center at Milan has hosted the Milan No-Till Field Day since 1981; the 34th edition on July 23, 2026, continued to draw thousands of visitors. The town sits in Gibson County, within commuting distance of Humboldt’s and Jackson’s employers.
What borrowers should know
Rising prices on thin data. The median rose 18.4% year over year on 28 sales, and the data covers the three months ending July 2026 (Redfin).
Inspect older homes. Like Humboldt, Milan is in the Jackson region, where THDA found about 44% of vacant units substandard.
Tax and assistance. Gibson County’s effective property tax rate is about 0.66%, and THDA’s 5% option would cover about $11,200 at the median price.
What brokers should know
Agriculture is the local specialty. Farm operators and ag-service business owners often write off much of their income; 12/24-month bank statement loans can qualify them on cash flow.
National Guard members and veterans tied to the training site are a natural VA audience: no down payment and a 580 minimum FICO.
With a large income gap, many local first-time buyers will need assistance; pairing FHA with THDA DPA is the most practical path.
9. La Follette: Lake Country With the Lowest Tax Rate
La Follette has the lowest local median income in the top 10, even though its prices sit mid-pack and its property taxes are the lowest on the list.
It is the largest city in Campbell County, on the edge of the Cumberland Plateau near Norris Lake. Nearby Cove Lake State Park covers 606 acres, with an 11-mile section of the Cumberland Trail, 106 campsites and a lake fed by Cove Creek, where the Norris Reservoir extends (Tennessee Department of Tourist Development).
Campbell County had about 40,600 residents in 2026 and a June 2026 unemployment rate of 4.16%. Its largest employers include the state, the county school district, Walmart, Aisin Automotive Casting and local hospitals. The La Follette ZIP code had about 4,650 jobs in 2025 but about 8,370 resident workers, so many residents commute out (East Tennessee Economic Development Agency).
What borrowers should know
The lowest property tax on the list. Campbell County’s effective rate is about 0.37%, roughly $68 a month on a median-priced home.
Slow but rising market. The median price rose 15.7% from a year earlier, but on just 16 sales, and homes took a median of 65 days to sell (Redfin). Patient buyers can negotiate.
Incomes vary across the county. Campbell County’s median household income was about $51,600 in 2024 (ETEDA), well above the city figure, so county-wide buyers may find the payment more manageable than the gap suggests.
What brokers should know
Lake-area second homes and rental cabins are a key niche. DSCR works for investors whose properties cash-flow, and conventional financing may suit second-home buyers; confirm occupancy eligibility with your account executive.
Commuters working in Anderson and Knox counties often have solid W-2 income; HomeReady and HomeOne with 3% down fit buyers with limited savings.
Elizabethton rounds out the list with one of the higher median prices, offset by a strong ownership culture and a stable manufacturing base.
Elizabethton’s landmark is its covered bridge over the Doe River, built in 1882 for about $3,000 and nicknamed the “five-dollar bridge” because the contractors netted just $5. It survived Hurricane Helene on September 27, 2024, when the Doe crested at 10.84 feet, its second-highest level in town (Appalachian Places). Nearby, Sycamore Shoals State Historic Area marks where more than 1,000 Overmountain Men mustered in September 1780 before the Battle of Kings Mountain (National Park Service).
The Carter County seat has a long manufacturing history. Snap-on, which has made hand tools in Elizabethton for about 50 years, announced a $44 million expansion with 50 new jobs in January 2024. Carter County’s unemployment rate was 3.8% in July 2026.
What borrowers should know
Check flood risk first. After Helene, the state created a $100 million emergency loan program for affected counties, including Carter County (WLOS). Look up any property on the FEMA Flood Map Service Center and get a flood insurance quote before you make an offer.
Strong ownership culture. 6% of homes are owner-occupied (Census QuickFacts), and the market is active, with 62 sales in August 2026 and a median of 52 days on market (Redfin).
Tax and assistance. Carter County’s effective rate is about 0.51%, and THDA’s 5% option would cover about $12,600 at the median price.
What brokers should know
Flood zone determinations, flood insurance and repair escrows will come up more often here than elsewhere on this list. Set expectations with borrowers early.
Owners rebuilding or upgrading after storm damage may want to keep their existing first mortgage; an AD Mortgage second mortgage (up to 90% CLTV, loans up to $500,000) is worth reviewing.
Manufacturing employees at Snap-on and other local plants are typical FHA and conventional borrowers.
Conclusion
Tennessee’s cheapest places to live in 2026 are not all alike. Dyersburg is the only city where the typical household already earns more than a median-priced home requires. Memphis and Humboldt come close, and the rest of the list, from university-town Martin to two-state Bristol and lake-country La Follette, offers homes far below the statewide median, with a local income gap that the right loan structure can often close.
The borrower mix ranges from W-2 plant workers and Memphis gig workers to student-rental investors in Martin and storm-recovery homeowners in Elizabethton. Partnering with AD Mortgage gives you one wholesale lender for all of them:
FHA and VA with a 580 minimum FICO, including no-down-payment VA financing for veterans.
DSCR loans for investors, qualifying on rental cash flow with no income or employment documentation.
ITIN loans for borrowers who file taxes with an Individual Taxpayer Identification Number.
Second mortgages for homeowners who want to tap equity without refinancing their first loan.
Program terms change, so always confirm current guidelines on the AD Mortgage programs page or with your account executive. Whether you are buying your first home in Dyersburg or building a referral pipeline across West and East Tennessee, the affordable homes are here. The right financing turns them into closed loans.
Estimates in this article are for comparison only and are not loan offers or guarantees of eligibility. Actual rates, payments, taxes and insurance vary by borrower and property.
Read More on Most Affordable Places: Find Your Dream State!
AD Mortgage offers a full suite of products to meet your clients’ needs, including DSCR loans, bank statement loans, and conventional loans. As a trusted mortgage lender, we provide flexible solutions and competitive rates to ensure you can deliver the best options for your borrowers.
Explore our exclusive broker package and benefit from partnering with AD Mortgage today. Plus, use our loan calculator for instant quotes and pricing on any product. Become a partner and access the best tools to grow your business.
Written by
Carl Holman
Communications Manager
As AD Mortgage’s Communications Manager, Carl Holman has more than 20 years of expertise in marketing, media relations, and communications, having spent 10 years of his career in mortgage lending and real estate. He holds a Bachelor’s in Journalism and Mass Communications from the University of South Carolina.
Thank you, you're successfully subscribed! Please confirm your subscription in your email.
Thank you, you're successfully subscribed! Please confirm your subscription in your email.
