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Chattanooga Cost of Living 💰 | Is Chattanooga Affordable?

Last Updated on: 26th July 2023, 10:17 pm

Looking for an affordable place to live with an excellent quality of life and job opportunities? Don’t overlook the Scenic City! The cost of living in Chattanooga is below the national average and the city boasts a diverse economy with median income on the rise. You’ll find it easy to afford rent or even homeownership in this mid-sized Tennessee city while enjoying breathtaking mountain views and outdoor recreation. Here’s a complete overview of the Chattanooga cost of living to help you compare it with what you’re paying now for typical living expenses.

Chattanooga Cost of Living Index

How much does it cost to live in Chattanooga? One of the best ways to understand what you need to earn to live in the city is to compare the Chattanooga cost of living index with your current city or the national average. The cost of living index compares common expenses between cities.

The cost of living index in Chattanooga is 94.7%. That means Chattanooga is more than 5% more affordable than the U.S. average.

Healthcare and groceries are pretty close to the U.S. average, but transportation and utilities in Chattanooga are about 10% cheaper. The cost of housing in Chattanooga is also below average for the U.S.

The Bureau of Labor Statistics considers Chattanooga part of the Southeast region. The Consumer Price Index for the region recently increased 1.4% not including energy. The cost of food experienced the greatest increase at 3.3% over the previous year while medical care and housing increased 2%. The cost of energy dropped 8.3%. Compared to the U.S. average, the South region spends less on housing, food, healthcare, and personal insurance.

Cost of Groceries, Food, Gas & Household Items in Chattanooga

You’ll enjoy a low cost of living in Chattanooga with grocery costs that are close to the national average. Housing and utilities in Chattanooga are even more affordable which makes homeownership within reach for more people. Here’s what you can expect to pay for common living expenses in Chattanooga.

Cost of items in Chattanooga:

  • Steak (ribeye, one pound): $11.15
  • Milk (whole, ½ gallon): $2.01
  • Eggs (one dozen, grade A): $1.30
  • Potatoes (5-pound bag): $4.09
  • Bread (wheat): $3.50
  • Beer (Heineken’s 6-pack): $9.76
  • Movie ticket: $11.80
  • Average cell phone bill: $180.62
  • Average electricity bill in Chattanooga: $141.21
  • 31-day unlimited CARTA bus pass: $50
  • Gasoline (one gallon, regular): $2.187 (10th lowest gas prices in the U.S.)
  • Car insurance (minimum liability): $358 (state average, among the lowest)


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Chattanooga Real Estate Market

Housing is one of the biggest living expenses you face. How does Chattanooga compare to where you live now?

The Chattanooga housing market is very affordable! The median home price in Chattanooga is $230,000, below the national average, with an average price of $134/square foot. That’s up more than 12% year-over-year thanks to an influx of new construction. You can find older 4-bedroom homes in the $200s, although some high-cost areas start in the $400s. You can check online for Chattanooga, TN homes for sale to see what your budget can get you.

Some of the grandest homes are found in areas like St. Elmo, a neighborhood developed in the 1880s with Queen Anne, Tudor Revival, and Colonial Revival homes. In Fort Wood to the east, you’ll find Victorian, Neoclassical, Colonial Revival, and Queen Anne cottages. The historic Ferger Place neighborhood was largely built by middle-class families with open floor plans and spacious front porches. Here, you’ll find plenty of Prairie, Craftsman, Tudor Revival, and Colonial Revival homes.

Along with its historic districts, Chattanooga has dozens of new home communities. The Cottages at Brow Wood, 20 minutes from downtown, offers mountain views with courtyard cottages and no exterior maintenance needed. Heritage Walk is an urban-inspired new home development attached to Heritage Park with a playground, pool, and clubhouse. This community offers large homes starting in the $400s.

The most expensive areas to live in Chattanooga include downtown, Black Creek Mountain, Lookout Mountain, and Signal Mountain. If you’re looking for a safe and affordable neighborhood in Chattanooga, Hixson is a good choice. You can explore some of the best Chattanooga neighborhoods here.

Chattanooga Rental Market – Average Rent in Chattanooga

Chattanooga has a low homeownership rate of just 53% compared to the national average of 64%. Most people in Chattanooga prefer to rent. The average rent in Chattanooga is $1,140 – far below the national average! A one-bedroom apartment in Chattanooga is just $1,023 per month according to RentJungle.

This average rent can get you a lot in Chattanooga. Rent at the luxury 1400 Chestnut apartment building starts at just $1,100 with high-end amenities like a resident clubhouse with Starbucks, a fitness center with a yoga studio, and a resort-style swimming pool with a lounge, wine station, and fire pit.

5 Points North Shore is another popular choice. Located near Coolidge Park and the Tennessee River, this new apartment building has units starting at $1,200 with open floor plans, a central resort-style pool, and a striking modern design.

Average Salary & Household Income in Chattanooga

How much do you need to make to live in Chattanooga, TN? It’s helpful to start with the average salary and household income.

The average salary in Chattanooga is $57,000 with an average hourly rate of $16.52 according to Payscale. Wages have recently trended up 0.9% while the cost of living has dropped 3%. Here are average salaries in common professions:

  • Office manager: $42k
  • Operations manager: $55k
  • Electrical engineer: $82k
  • Registered nurse: $26/hour
  • Licensed practical nurse: $20/hour
  • Customer service representative: $13/hour

The median household income in Chattanooga was $45,500 in 2016, but it reached $50,000 for the first time in 2017. That’s lower than the U.S. median of $63,200. However, Chattanooga recently had the 6th fastest growth in median household income among metropolitan areas in the U.S. Most major cities in the Mid-South have household income lower than the U.S. average. Here’s how other major cities compare:

  • Atlanta: $65,400
  • Nashville: $63,900
  • Birmingham, AL: $53,000
  • Knoxville: $53,000
  • Memphis: $51,000
  • Tri-Cities, TN: $40,700

The Chattanooga economy is strong and based around tourism, natural resources, healthcare, manufacturing, and service industries. Major employers include:

  • BlueCross BlueShield of Tennessee
  • Erlanger Health System
  • Hamilton County Schools
  • Volkswagen of America
  • City of Chattanooga
  • Tennessee Valley Authority
  • McKee Foods Corp.

Income, Sales & Property Taxes in Chattanooga

Don’t forget to consider taxes when assessing the cost of living in Chattanooga, TN. Fortunately, despite its high sales tax, Chattanooga has low taxes with one of the country’s lowest property tax rates and no income tax!

Chattanooga Sales Tax

The sales tax rate in Chattanooga, TN is 9.25%. This includes the Tennessee sales tax of 7.0% and the Hamilton County sales tax of 2.25%. Tennessee has the highest average combined state and local sales tax rate in the United States.

Property Tax Rate in Chattanooga

The Chattanooga property tax rate is 2.277 per $100 of assessed value. Residential real estate is assessed at 25% of its appraised value. This gives Chattanooga, Tennessee one of the lowest property tax rates in the U.S. at about half the national average. Learn more about property taxes in Chattanooga here.

Tennessee Income Tax Rate

Tennessee is one of seven states with no income tax. You will not pay income taxes in Tennessee, but there was a 1% tax on interest and dividends for the 2020 tax year.

Chattanooga vs. Nashville Cost of Living

Nashville and Chattanooga, Tennessee are just 130 miles away from each other, but how do they compare in terms of affordability? When you compare the cost of living in Chattanooga vs. Nashville, you’ll find that Chattanooga is far more affordable.

According to Numbeo, you would need $4,900 in Nashville for the same standard of living you get with $4,100 in Chattanooga. While Chattanooga boasts affordable average rent of $1,140, the average apartment rent in Nashville is $1,360. The cost of living index in Nashville is 98.5%: still a bit lower than the national average but higher than Chattanooga.

The Chattanooga cost of living is just one of the many things that make the Scenic City so attractive. Are you set on moving to Chattanooga? Call the best Chattanooga movers to get a free moving estimate. We look forward to helping you settle into this beautiful city so you can experience its affordability and amazing attractions for yourself!


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