Living in Tennessee vs North Carolina: Which State is Better?

Picking the best state and location to call home is not easy. The choice really comes down to your personal priorities. Consider the balance between the cost of living, modern services, weather, and how developed a community you want to live in. For many people, the Southern states are especially desirable for their warmer climate, waterfront access, and growing economy. Take living in Tennessee vs North Carolina–which southern state is best for you?

One helpful tactic is to compare living in one state to another. These next-door neighbors share advantages like a beautiful climate, friendly people, and plenty of outdoor recreation options. But it’s the differences that can help you decide which has the right quality of life for you. Hopefully, our guide can illuminate which state is best for you.

Cost of Living

Sperling’s Best Places establishes a benchmark for comparing the cost of living. The national average is set at 100; any score above 100 means an area has higher living costs, while a figure below means less expensive.

Based on this cost-of-living index, Tennessee has the edge over North Carolina. Tennessee’s overall score is 90.3, while North Carolina’s is 98.5. This means that, on average, living in Tennessee is slightly more affordable than living in North Carolina.

One key area is housing. In this regard, both have affordable housing costs below the national average. North Carolina’s cost savings come in transportation; in all other categories, Tennessee was slightly cheaper.

Remember that both are large states, and the cost of living varies widely. For example, the cost of living in Charlotte, NC, is much higher than in Boone, NC.

Population Growth

Population growth has two sides: the positives of stimulating the economy, construction, and amenities, and the negatives of more expensive goods and higher housing costs.

Both states are growing rapidly, with North Carolina third in the nation and Tennessee sixth by numeric growth. Both were in the top ten by percentage growth from 2022-2023.

That said, North Carolina is the more populated state by about 3.7 million residents.

Although Tennessee’s growth may not beat the Tar Heel State, it does have some of the nation’s fastest-growing suburbs near Nashville. In only ten years, Tennessee added an extra 700,000 residents to reach 6.9 million people. Its most populated counties were Shelby (Memphis), Davidson (Nashville), and Knox (Knoxville).

Boyd Center Population Projections say Tennessee could add nearly a million people over the next 20 years and have 7.87 million residents by 2040.

North Carolina’s most populated counties – Wake, Mecklenburg, Guilford, and Forsyth – are split between the bustling Raleigh-Durham metro and Charlotte metro.

Real Estate Taxes

Both states have a system where the counties assess and collect property taxes. Millage rates vary across the state.

Property taxes in North Carolina are based on fair market values, which are set every four to eight years. Each county has a different value reappraisal timetable. One mil equals $1 for each $100 of appraised value in this state. Higher property values and a higher overall millage rate make Tennessee more favorable for real estate taxes.

North Carolina has a homestead exemption for those 65 years old or older who suffer from a permanent disability and earn less than $38,000 annually. The exemption is set at either $25,000 or 50% of the assessed value. A disabled veteran may qualify for an additional $45,000 exemption.

Tennessee’s overall property burden ranked it the 15th lowest in the nation. It assesses property taxes at 25% of the home’s market value. The local tax administration assesses and collects the taxes. Local cities may also charge a property tax. You’ll want to look at the tax rates for the specific county and town you want to live in. The average effective property tax rate in Tennessee was 0.67% in 2023.

Taxes for Retirees

Retirement income is taxed in nearly every state, including Social Security payments. On the other hand, a few select states do not tax the most frequent types of retirement income: 401(k), IRAs, and pensions. Obviously, retirees benefit greatly from no-taxation states.

Tennessee is one of those states that ended up at no. 8 on Bankrate’s list of states favorable for retirement in 2022. Not only does Tennessee not have income taxes and estate or inheritance taxes, but prescription drugs are also exempt from sales taxes. Furthermore, with a lower average property tax rate and a “tax freeze” program for seniors 65 and up, retirees can rest easy knowing they won’t run through their fixed income paying taxes and fees. Learn more about the advantages of retiring to Tennessee.

On the other hand, retirement in North Carolina is less favorable. The state’s flat income tax applies to all income; however, the income tax rate is decreasing over the next decade. Personal withdrawals from retirement accounts are taxed, as are pension incomes. There is no tax on social security, and an estate tax does not exist.

Job Markets

When weighing Tennessee vs North Carolina living, look at the strength of their economies. In this case, it’s good news. Both report unemployment rates under national averages and new job growth. The unemployment rate in North Carolina was 3.6% in May 2024, while the unemployment rate in Tennessee was 3%. These low figures, growing industries, and new jobs signal plenty of opportunities.

For 2023, North Carolina ranked third for job growth. Healthcare, retail, education, finance, and manufacturing are the top sectors in North Carolina. The furniture industry is well-known throughout the state, as is the automobile sector. The Research Triangle attracts leading talent in biotechnology, pharmaceuticals, and other industries. Medical hospitals are healthcare leaders in quality care and research. Fortune 500 financial leaders work from Charlotte. The energy sector is rounding out its diverse economy, with Duke Energy at the forefront. Bank of America, Lowe’s, Duke Energy, Wake Forest Baptist Health, and Home Depot are some of the major employers.

The job market in Tennessee is mixed. Specific areas see more robust growth than others. Nashville’s employment snowballed over the past decade and benefited from the city’s strong employment opportunities. According to The Wall Street Journal and Moody’s Analytics, the city had the second-best job market in the country. The region has become a tech center, with technology expanding by 51% between 2015 and 2020. By size, FedEx, DolgenCorp, HCA Healthcare, Dollar General, and Community Health Systems are among Tennessee’s top employers.

Sets of figures are from June 2024. Hourly wage data is based on average hourly earnings of private employees from the FRED.

* From Workforce Trends from 2018 to 2028

Outdoor Recreation

Both states have a lot to offer in terms of recreational opportunities. The Appalachian Trail runs along their border, and they share the Appalachian Mountains and Great Smoky Mountains National Park.

North Carolina has a long list of great outdoor activities, with more than 41 state parks and natural areas. Mount Mitchell State Park is the highest peak in the Eastern United States. Its western mountains are where people living in the South and Mid-Atlantic come to vacation and play. The mountain region has escapes for winter skiing, rock climbing, fly fishing, camping, mountain biking, and other activities.

North Carolina cyclists have access to over 100 miles of trails, including the state-spanning Mountains-to-Sea Trail.

Do you love playing around the water? If so, North Carolina is a great state to live in. Get out on the open water at over 50 lakes. Lake Mattamuskeet is the largest natural lake, but Lake Norman is the largest reservoir. Lake Murray and Kerr Lake are popular destinations for bass fishing and sailing enthusiasts.

Besides lakes, North Carolina has something Tennessee doesn’t: over 300 miles of sandy beaches, saltwater fishing, kiteboarding, and deep-sea adventures. The Outer Banks and Wrightsville Beach are two popular stops on the North Carolina coast.

Tennessee is no slouch for outdoor recreation, too. It splits the Great Smoky Mountains National Park with North Carolina. Add to that a few other national parks, over 50 state parks, and forests, and residents have over 800,000 acres of public lands available for exploration.

Go whitewater rafting, rock climbing, and fly fishing in the East Tennessee mountains. Get underground spelunking in some stunning caves. People come here for the adventure and the escape. As you move into central and West Tennessee, spend the day boating or water skiing on one of the big reservoirs or waterways. Hiking, mountain biking, road cycling, and camping are all options at parks throughout the state.

Educational Quality

Both states have robust public school systems, but Tennessee has outpaced North Carolina in education quality for public K-12 schools. US News and World Report ranks North Carolina’s public K-12 schools as the 26th best in the nation, while Tennessee came in as no. 18.

*Figures are from 2021-2022, except the graduation rate which is from 2020.

According to the NEA, North Carolina spent $11,651 per student in K-12 education in 2021-22. The state had 1,429,275 enrolled students and 94,328 teachers. The four-year graduation rate was 87% in 2021-2022.

Tennessee has approximately 998,000 children enrolled in public schools, split into 147 districts with large urban and rural populations.

Both states have many prestigious colleges and universities in higher education. In this area, North Carolina exceeds Tennessee with a 12th-place ranking. Some notable institutions in North Carolina include Duke University, UNC Chapel Hill, and Wake Forest University.

Tennessee isn’t lacking in quality higher education. Vanderbilt University ranks among the nation’s top schools. The state has a program providing free two-year community college or technical schools for its high school graduates, which is notable in the United States.

City Living

Each state promises the excitement of big-city living, but when comparing Tennessee vs North Carolina living, the Tar Heel Cities are generally more diverse and larger than Tennessee’s.

Home to country music stars and hopefuls, Nashville packs in the rhinestones and glittering entertainment venues. Music is part of its culture, but there’s more happening here. The city is a center for healthcare and technology businesses, too.

Memphis continues Tennessee’s musical city tradition. The birthplace of blues and its deep ties to rock’n’roll, gospel, and soul are infused in this Mississippi River city in the southwestern corner of Tennessee.

Raleigh is North Carolina’s capital. Its greater metropolitan area is a major technological and research hub thanks to Research Triangle Park and several world-leading universities. The Raleigh-Durham metro not only brings brain power but also has state cultural institutions like the natural history museum.

Charlotte is the state’s largest city, with over 2.6 million taking advantage of its recreational and career opportunities. Many Fortune 500 companies and financial institutions have offices in Charlotte, which is the second-largest financial center outside of Wall Street. Residents have multiple museums and art galleries, and they also watch professional sports teams. Charlotte is also the home of NASCAR.

Wilmington is a gorgeous historic city on the coast, with a population of over 282,500. This city’s attractions include a two-mile Riverwalk, beautiful beaches, a historic downtown area, and the film industry. The University of North Carolina at Wilmington adds a college town vibe to a coastal city.

Asheville is in the western North Carolina mountains. Over 500,000 residents live in Beer City, USA. Locals enjoy its avant-garde art scene, live music, and outdoor activities.

That Southern Weather

The climates in the two states are generally similar, but it isn’t easy to make broad statements about them. The mountains, coastal, and lowland regions have different climates. Each experiences four distinct seasons, but conditions can vary widely depending on where you are.

North Carolina breaks into two different climate regions- a moderate continental region in the mountains and a subtropical climate in the southeast corner.

The summers in the Appalachian Mountains are usually cool, and the winters are often chilly. January temperatures average around 40F, while July temperatures average around mid-80F. In the mountains, winter snowfall is common. The higher you go up in elevation, the colder it will be and the longer the snow might last.

The climate in the North Carolina coastal lowlands turns up the heat and humidity. Summers in this region are hot and humid, while winters are mild. January’s average temperature is around 54F, while July’s is around 90F. There is a lot of rain here. And right along the coastline, tropical storms threaten to move in from the Atlantic Ocean.

Like North Carolina, Tennessee has four distinct seasons. The average summertime temperatures range from 86F to sometimes upwards of 100F. The humid summers can be difficult for those not used to them. On the bright side, those hot summers ease into colorful autumns and cooler winters, with January averaging around 35F.

The state’s climate is most commonly described as humid subtropical, but temperature extremes are more common in the southern and western parts than in the mountainous eastern region. The average annual temperature across the state ranges from 46F near the top of Mt. LeConte in the Great Smoky Mountains to 62F closer to the border with Arkansas.

Sports Culture

Both North Carolina and Tennessee are sports-crazy states. Diehard fans of all the major league teams can be found in both states, but each has its unique sporting culture.

In North Carolina, college basketball is king. The state is home to some of the most storied programs in the sport’s history, and fans pack into arenas to watch their favorite teams battle it out. Duke and UNC Tar Heel games are intense and often packed. Some of the best players in the NBA have come through North Carolina schools.

The state’s professional teams are also popular, with the Carolina Panthers and Charlotte Hornets both having a large following. NASCAR is also headquartered in Charlotte and has a loyal fan base.

Tennessee, on the other hand, is a football state. The Tennessee Titans are one of the most popular teams in the NFL. Fans pack into Nissan Stadium to watch them play. College football is also huge in the state, with the University of Tennessee Volunteers having a supportive fanbase. The rivalry with Vanderbilt University is intense.

Both states have programs for professional baseball, hockey, soccer and other sports.

Local cultural attractions

North Carolina and Tennessee have rich cultures backed by unique history and traditions. Southern hospitality unites them both.

North Carolina loves its sports and recreational culture, while Tennessee is known for its music and food.

In North Carolina, visit the Wright Brothers National Memorial. The first powered flight occurred in Kitty Hawk, and the memorial commemorates this momentous event. Near Asheville, millions come to see the Biltmore Estate, the largest privately owned home in the United States. The estate is open to visitors and features a winery, gardens, and more.

Country music fans flock to Tennessee to visit the Country Music Hall of Fame and Museum and the Grand Ole Opry. Icons like Dolly Parton have strong roots in the state; the country music icon runs the Dollywood amusement park in Gatlinburg.

Nashville gave us Hot Chicken, a new trending southern food. Memphis BBQ is renowned, but North Carolina is no slouch. NC also has Cheerwine, a cult-following soft drink, and fast food restaurant Bojangles. Both are distinct styles of slow-roasting meat with particular spices and sauces.

There is no clear winner when it comes to culture. It really depends on what you’re looking for in a state.

Tennessee vs North Carolina Living

Deciding where to grow your roots is tough. We hope this guide has helped give you a picture of each state’s advantages. Tennessee is the clear choice if you’re looking for a state with a low cost of living, lots of live music, and warm weather. North Carolina is the place for you with incredible career pathways, acclaimed higher education, and a variety of outdoor activities. No matter what you’re looking for, both states have much to offer. If you’re still not sure, why not compare to South Carolina?

Updated June 2024