Is buying a home in Knoxville affordable? With the pressure of increasing housing costs building, that's one of the big questions on everybody's lips! Unfortunately, the answer is not black or white! The affordability of buying a home in Knoxville is going to vary depending on where you are moving from. Are you a recent transplant from a more expensive state or a Knoxville local faced with dwindling housing prospects in your hometown? Knoxville consistently features on national lists of affordable cities for relocating, even though the housing market is becoming increasingly exclusive. In fact, U.S. News & World Report has named Knoxville the 10th cheapest place to live! Let's take a look at how much buying a home in Knoxville costs for those already living in the city.

How Much Do You Need to Earn to Afford Buying a Home in Knoxville?

According to a recent study by Redfin, if you want to afford to buy a home in Knoxville, you will need an annual income of at least $102,276. This is based on a median-priced property priced around $375,000, representing a 28% increase from the previous year. The median monthly mortgage payment sits at around $2557. Buying a home in Knoxville is more affordable compared to other cities. A homeowner's national average to earn to buy a median-priced home is $114,627. That is a 50% increase compared with pre-pandemic figures and is the highest annual income required to buy a home that has been recorded!

Housing Costs & Mortgage Payments Are Higher Than Ever

The escalating challenge of homeownership affordability stems from the undeniable impact of soaring housing expenses. The formidable duo of exorbitant mortgage rates and surging home prices have pushed housing costs to unprecedented heights, rendering homeownership an increasingly distant goal for many residents. In August, the average U.S. home commanded a price tag of approximately $420,000, coinciding with a 7.07% interest rate on a 30-year fixed mortgage. Fast forward to October, and the interest rate reached a staggering 7.88%, the highest in over two decades, as reported by Bankrate. Redfin notes a historic peak in the typical U.S. home buyer's monthly mortgage payment, now at $2,866, marking a substantial 20% surge from the $2,395 recorded in 2022.

How Was Housing Affordability Calculated?

In order to determine how much a homeowner needs to earn for buying a home in Knoxville or other cities, Redfin compared the median mortgage repayments made in August 2023 and August 2022. To be considered 'affordable' for the purpose of the study, the homebuyer should spend a maximum of 30% of their income on housing. The study also assumed that the mortgage payments were based on the homeowner having made a down payment of 20% when buying their home. The median sale price and the average mortgage interest rate for those months.

Is Living in Knoxville Affordable?

Aside from the cost of buying a house in Knoxville, many people want to know if it is affordable to live in the city. It's all well and good being able to afford the mortgage repayment when buying a house in Knoxville, but you also need to know that you can afford the everyday cost of living in the city as well. Let's take a look at some of the things that make Knoxville a consistent feature on lists of the most affordable cities in the United States.

• Steady Job Market - Knoxville is considered one of the top cities in the United States and has many employment opportunities across many different industries. Several large corporations make their home here in Knoxville.
• Affordable Public Transit - One of the unique things about Downtown Knoxville that contributes to the affordability of living here is the unique transit system. The Knoxville Trolly is free of charge from Monday to Saturday, excluding game days and holidays. It is great for traveling around the Downtown area and the University of Tennessee campus.
• The Great Outdoors - When buying a home in Knoxville, one of the big attractions for many people is the wealth of opportunities to enjoy the great outdoors. With countless lakes, rivers, parks, and hiking trails, you will have plenty of leisure options available that won't cost you a dime!
• Market Square Entertainment - If outdoor pursuits are not your thing, you may find Downtown's Market Square more your style. The area is known for its lively arts and entertainment culture. You will be able to catch outdoor performances and farmer's markets and enjoy an abundance of bars and restaurants that offer affordable dining options. There are also regular arts festivals to attend.

It's important to note that economic conditions, housing markets, and cost-of-living indices can change over time, but Knoxville has been recognized for its relatively low cost of living compared to the national average for the last couple of years. Housing costs, in particular, have been reasonable, with a range of housing options available, including apartments, single-family homes, and more if you are interested in buying a home in Knoxville.

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