Cost of Living in Knoxville, TN: What First-Time Builders Need to Know

Knoxville, Tennessee is quickly becoming a top pick for people looking to settle down, especially first-time home builders. With beautiful mountain views, friendly communities, and a slower pace of life, it’s no surprise so many folks are thinking about calling East Tennessee home.

But if you’re new to the area or new to building, you may be wondering: What’s the real cost of living in Knoxville TN? From housing prices and utility bills to groceries and taxes, here’s everything first-time builders should know.

Let’s start with the biggest cost factor: Your home.

The average home price in Knoxville is significantly lower than in many other cities across the US. While national home prices are climbing, Knoxville remains a place where you can still find space, comfort, and value. As of 2025, the median home price is around $330,000, but that number can go higher or lower depending on location and size.

If you’re a first-time homebuyer, building your own home might feel out of reach. However, it’s actually more affordable than many people think. With the Red Door Homes process , you can customize a new home that fits your lifestyle and your budget.

If you build instead of buying, you can:

Plus, you get to avoid the bidding war on older homes and maintain more financial control.

Once you’re in your home, what will it cost to maintain it? Luckily, utility costs in Knoxville are typically lower than the national average.

Depending on your personal usage and the season, you can typically expect a breakdown similar to the following:

Tennessee Valley Authority (TVA) provides energy to the region, and Knoxville Utilities Board (KUB) offers budget billing options that help you avoid spikes in hot summers or cold winters.

If you do decide to build from scratch, be sure to ask your builders about energy-efficient windows, appliances, and insulation. These choices can lower your bills for years to come.

Another reason people are drawn to East Tennessee? Low taxes.

Tennessee has some of the lowest property taxes in the country. In Knox County, you’ll pay about $6.13 per $1,000 of assessed value (not market value), which makes homeownership much more affordable long-term. We also don’t have any state income tax! That’s more money in your pocket for your mortgage, savings, or outdoor adventures.

Home insurance in Knoxville usually ranges from $1,000–$1,400 per year, depending on your coverage. Homes built with newer, stronger materials may qualify for lower premiums, which is another perk of going the custom-build route.

Knoxville is a driving city. Most people own a car, and public transportation is limited compared to bigger metro areas. Our gas prices are often lower than the national average, and car insurance is fairly affordable. The average commute is just 20-25 minutes. 

If you work remotely or plan to work nearby, you can save even more by building in an area that shortens your drive. If you plan to build with us, Red Door Homes can help you find a homesite that fits your lifestyle and your travel needs.

Don’t forget to factor in everyday costs like food, shopping, and other essentials! Knoxville’s grocery prices are reasonable and typically close to the national average. You’ll find popular chains like Kroger, Publix, and Aldi, plus local gems and farmers markets for fresh, affordable produce.

And whether you love BBQ, southern comfort food, or trendy downtown eats, Knoxville has a great (and affordable!) food scene. You can grab a delicious meal out for under $15, or treat the family to dinner without breaking the bank.

Knoxville is proud to be home to several highly-rated medical facilities, including UT Medical Center and Parkwest Medical Center. Healthcare costs here are on par or slightly lower than in many other parts of the country. Generally, you can find options at some local facilities with lower prices, such as: 

Knox County Schools serve most of the region and include a mix of public, magnet, and charter options. Private school tuition varies, but is often lower than in large metro areas. Knoxville is also home to the University of Tennessee, a great option for future students and job seekers alike.

One of the best things about the cost of living in Knoxville TN? You don’t have to spend much to enjoy life. Just a few of the things you can do for little to no cost include:

There’s also a vibrant Knoxville art and music scene. From free concerts in Market Square to UT Vols football games, we always have something going on!

Budgeting Tips for First-Time Home Builders

If you’re thinking of building, here are a few smart ways to stay on track:

Know what you can afford: Work with a builder who helps you plan for your total costs, including land, site prep, and permits.

Plan for extras: Don’t forget landscaping, furniture, or window treatments.

Ask questions: Red Door Homes guides you through every step, from choosing a floor plan to staying within your monthly budget.

Think long-term: New homes often come with warranties and lower maintenance needs, saving you money over time.

When it comes to the cost of living in Knoxville TN, it’s easy to see why so many people are making the move. Affordable housing, low taxes, and a great quality of life make East Tennessee a dream for first-time builders.

At Red Door Homes, we’re here to help make that dream real, without surprise costs or confusing steps. Whether you're local to Knoxville or moving here for the first time, our team is ready to help you build a beautiful, budget-friendly home you'll love.

Ready to explore your options? Contact us today to start planning your East Tennessee dream home.