Trends in housing prices are rightfully a significant issue in Middle Tennessee. But much of the media attention on price loses sight of the true cost of housing, and just how affordable housing is in Tennessee.
For purposes of analysis, consider the cost of housing as a three-legged stool. And when all three legs are firm, the stool supports an affordable housing market.
The first and most obvious leg is the purchase price.
The second leg is housing payments, which is heavily influenced by mortgage interest rates. With rates hovering near historic lows for much of this decade, monthly loan payments have remained low, which has increased the buying power of all Americans. And Tennessee ranks as the 12th lowest state for average real estate tax rates. At an average cost of $1,287, property taxes in Tennessee are just 62% of the national average ($2,089).
The third leg is household income. Local and state median family income is in line with the national median of $53,046. In Nashville, median household income is $46,758. Franklin’s median income is even higher at $81,432. Tennessee’s median income is $44,621.
This map shows the states with the highest and lowest property taxes, based on taxes as a percentage of home value in that state:
