Best Cities for Homeownership in Tennessee

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by on March 23, 2014

By Laurie Smith

Economists and the U.S. Department of Housing and Urban Development agree: spending more than 30% of your income on housing costs is unsustainable and leaves homeowners short on cash for food, clothing and utilities. Yet 40% (260,000) of renters in Tennessee are spending more than 35% of their income on housing, according to the Tennessee Housing Development Agency.

In order to help house hunters in Tennessee find the areas most attractive for homeowners, NerdWallet analyzed data for the 58 Tennessee cities, towns and places with more than 10,000 residents to answer three main questions:

1. Are homes available? We looked at the area’s homeownership rate to determine the availability of homes. A low homeownership rate is likely a signal of competitive inventory, more options for renters rather than buyers and expensive housing. Areas with a high homeownership rate led to a higher overall score.

2. Can you afford to live there? We looked at median household income, monthly homeowner costs and median home value to assess affordability and determine whether residents could live comfortably in the area. We used monthly homeowner costs to measure cost of living. Areas with high median incomes and low cost of living scored higher. Thinking of buying a home yourself? Learn more about current mortgage rates and mortgage refinancing options in our mortgage guide, as well as whether it’s best to rent or buy.

3. Is the area growing? We measured population growth to ensure that the area is attracting new residents and showing signs of solid growth. This is likely a signal of a robust local economy, which is another attractive characteristic for homebuyers.

For more details on our methodology, please see the “Methodology” section at the end of the study.

1. Arlington

Arlington, situated about 30 miles from downtown Memphis, is the third fastest-growing community on our list with an 11.9% population increase from 2010-2012. Boasting the second highest homeownership rate on our top 20 list at 90.7%, plus homeownership costs that take up just 25% of median household income, it’s no wonder why people want to move here. Property taxes are the second lowest in Shelby County, and job opportunities are plentiful at Arlington Industrial Park, home to multiple companies including Chem-Tainer, a bulk chemical storage tank manufacturer, and Americold, a provider of temperature-controlled warehousing and logistics.

2. Spring Hill

Located about 35 miles south of Nashville, Spring Hill has an 81.2% homeownership rate, and homeowner costs here take up just 23.9% of median household income. It’s also the fastest-growing community on our list with a population expansion of 13.2% between 2010 and 2012. Vehicle production has been a key industry in the area for more than 20 years. Between 1990 and 2007, the Spring Hill plant manufactured 3.7 million Saturn vehicles. Currently owned by General Motors, this facility produces the Chevrolet Equinox and employs nearly 2,000 workers. Like many communities on our list, Spring Hill was the site of a Civil War battle. This site and other historic properties like Rippavilla Plantation provide a window into the past for the town’s residents. The community is also in the early stages of developing a farm-to-table initiative, promoting locally grown food at farmers markets and through community-supported agriculture.

3. Mt. Juliet

Like many other communities in our top 10, Mt. Juliet, a suburb of Nashville, is experiencing significant growth in population and business. The population grew by 12% between 2010 and 2012, and it’s easy to see why. Bordered by interstates 40, 24, 65 and State Route 840, Mt. Juliet offers easy access to nearby universities, including Tennessee Tech University and Tennessee State University. This “City between the Lakes” offers plenty of ways to enjoy the great outdoors, including a community center, two city parks and a sports complex. Mt. Juliet has a homeownership rate of 82%, and monthly homeowner costs take up 24.1% of the median household income. The median home value here is $196,200. Residents here can enjoy Providence Marketplace, an open-air shopping complex with dozens of shops and restaurants.

4. Middle Valley

Middle Valley is a census-designated place located in the Chattanooga metropolitan area along the Tennessee River. Students here attend Hamilton County public schools and participate in sports through the Middle Valley Youth Association, which offers baseball, cheerleading and soccer. For shopping needs, residents take advantage of big retailers in nearby Hixson, such as Target, Kohl’s and JCPenney. Chester Frost Park, bordering Dallas Bay in Hixson, provides opportunities for camping, boating and fishing. Monthly homeowner costs here take up only 23.3% of the median monthly household income, and the median home value is $161,400.

5. Seymour

Located about 10 miles southwest of Knoxville, Seymour is another census-designated place on our list, like Middle Valley.  Homes here are affordable, with monthly homeowner costs taking up just 23% of median monthly household income, the most affordable in our top 10. Seymour’s population growth is also on the higher end of our list, with an increase of 7.8% from 2010 to 2012. For fun, residents can take advantage of the 18-hole Bays Mountain Golf Course. Every year the community gathers to celebrate the holidays at the Seymour Christmas Holiday Parade.

6. White House

Situated along Interstate 65 at the intersection of State Route 76 and U.S. Highway 31W, White House is about 25 miles north of downtown Nashville. This small town with a friendly atmosphere has a homeownership rate of 83.7%, and monthly homeowner costs take up 24.5% of the median monthly household income. Schools from the Sumner County and Robertson County public school districts serve the area. For relaxation, residents here take advantage of the White House Inn Library and the town’s parks and greenway. White House also offers residents the chance to make their mark on the city through its Living Legacy Tree Program, where residents can buy a tree and plant it in the park system to honor a special person or event.

7. La Vergne

Located about 20 miles southeast of downtown Nashville, La Vergne’s population grew by 6.9% between 2010 and 2012. To encourage newcomers to settle in the area, the city has a welcome center where potential new residents can ask questions about housing, jobs, schools or get help planning a visit. Potential homebuyers in La Vergne can take homebuyer education classes at Life of Victory international ministries, which offers government-approved financial counseling to guide future homeowners in their decision making. The median home value in town is $135,600, and residents spend 26.5% of the median monthly household income on homeowner costs. La Vergne offers many family-friendly events throughout the year, including the Great American Duck Race on July 1 and an annual Fourth of July celebration.

8. Collierville

Collierville offers its residents a mix of small-town charm and modern amenities. Just 30 miles east of Memphis, this town has a homeownership rate of 85.8%. Collierville homeowners spend 26.1% of their median monthly income on homeowner costs, and while that’s on the higher end of our list, it’s still below the federal government’s 30% gauge of affordability. Plenty of events take place in the historic downtown such as Fair on the Square, where residents enjoy live entertainment, art and food vendors. Looking for some retail therapy? Located just off Route 385, Carriage Crossing is an open-air shopping destination with national retail stores, restaurants and local businesses. Job opportunities are available at the FedEx World Tech Center – the 140-acre software and technology development headquarters of FedEx Corp. – and ThyssenKrupp Elevator Americas, North America’s largest producer of elevators.

9. Lakeland

Lakeland is just west of Arlington, our top city for homeownership in Tennessee, and is also a suburb of Memphis. Lakeland has an 80.1% homeownership rate, and homeowner costs are 26.1% of the median household income. The city is dedicated to preserving the natural terrain even as businesses and population increase rapidly by requiring that developers set aside land for parks and greenways. The crown jewel of Lakeland’s parks system is the 65-acre International Harvester Managerial Park, where visitors can hike, bike, picnic and fish. Students here attend Shelby County Schools.

10. Bartlett

About 15 miles northeast of Memphis, life is good in Bartlett. It’s a city of neighborhoods, with dozens of different sections governed by the Greater Bartlett Council of Neighborhoods. The homeownership rate is high at 84.1%, and homeowner costs take up 25.9% of the median monthly household income. Bartlett offers lots of opportunities for neighbors to get together, including a weekly summer farmers market, events at the Bartlett Performing Arts and Conference Center and book clubs at the public library. For homebuyers who need a little extra help, United Housing Inc. has its Helping Homebuyers Program, which offers up to $15,000 in down payment assistance and closing costs for qualifying homebuyers in Memphis and Shelby County.

   
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Rank City Nearest Big City Home Ownership Rate Median Selected Monthly Homeowner Costs Median Monthly Household Income Homeowner Costs as a Percentage of Household Income Median Home Value 2010-2012 Population Growth Overall Score for Home Owners
1 Arlington Memphis 90.7% $1,945 $7,767 25.0% $225,900 11.9% 87.8
2 Spring Hill Nashville 81.2% $1,516 $6,334 23.9% $197,500 13.2% 86.0
3 Mount Juliet Nashville 82.0% $1,463 $6,062 24.1% $196,200 12.0% 83.9
4 Middle Valley Chattanooga 85.9% $1,305 $5,611 23.3% $161,400 6.6% 76.3
5 Seymour Knoxville 73.2% $1,112 $4,832 23.0% $152,100 7.8% 70.9
6 White House Nashville 83.7% $1,385 $5,657 24.5% $177,300 4.9% 69.6
7 La Vergne Nashville 76.3% $1,222 $4,608 26.5% $135,600 6.9% 69.5
8 Collierville Memphis 85.8% $2,235 $8,554 26.1% $281,800 6.3% 68.9
9 Lakeland Memphis 80.1% $1,872 $7,161 26.1% $232,700 6.2% 66.9
10 Bartlett Memphis 84.1% $1,623 $6,269 25.9% $174,200 3.2% 65.4
11 Brentwood Nashville 93.5% $2,654 $11,109 23.9% $489,700 5.5% 65.3
12 Farragut Knoxville 90.0% $1,850 $8,212 22.5% $315,000 2.6% 64.3
13 Germantown Memphis 87.8% $2,234 $9,543 23.4% $286,100 0.8% 59.3
14 Smyrna Nashville 67.3% $1,288 $4,297 30.0% $150,800 5.3% 57.2
15 Kingsport Johnson City 66.0% $1,043 $3,426 30.4% $128,300 4.8% 55.7
16 Portland Nashville 63.5% $1,137 $4,038 28.2% $128,500 4.4% 54.5
17 Soddy-Daisy Chattanooga 68.6% $1,152 $4,107 28.0% $137,000 2.4% 53.2
18 Hendersonville Nashville 70.4% $1,605 $5,203 30.8% $197,000 3.6% 53.0
19 Clarksville Nashville 57.0% $1,166 $3,942 29.6% $132,900 5.9% 52.5
20 Franklin Nashville 68.2% $1,923 $6,658 28.9% $309,400 5.4% 52.1

Methodology

The overall score for each city was derived from each of these measures:

1. Homeownership rate made up 33.3% of the total score. A higher rate earned a higher score. The rate comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

2. Selected monthly owner costs as a percentage of median household income made up 16.7% of the total score. A lower percentage earned a higher score. Monthly homeowner costs as a percentage of median household income made up one-half of the affordability score. Median household income comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 03. Monthly homeowner costs come from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

3. Median home value made up 16.7% of the total score. A lower value earned a higher score. Median home value made up one-half of the affordability score. Median home value come from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

4. Population change from 2010 to 2012 made up 33.3% of the total score. A higher percent change earned a higher score. The 2010 population came from the 2010 American Community Survey 5-Year Estimates for all places in the state, Table DP 05. The 2012 population data came from the 2012 American Community Survey 5-Year Estimates for all places in the state, Table DP 05. NerdWallet calculated the percent change.

We evaluated 58 cities, towns and census-designated places (CDPs) in Tennessee with more than 10,000 residents for this study.

Image: Flickr/Jaime: https://flic.kr/p/5fJ9tV

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