Chattanooga, TN-GA
The Tennessee-Georgia border metro building faster than Nashville on a per-capita basis. Chattanooga spans 6 counties and 564,466 residents, with 3,085 building permits over the trailing twelve months — 5.47 per 1,000 residents. Net IRS migration of +1,535 and a 65.9% five-year HPI gain signal a mid-size metro punching above its weight.
The numbers that matter most
What an investor checks first when sizing up a new metro — affordability ratio, rent vs income, cap rate proxy, and where the market is moving. Each metric shown vs. state and national medians for instant context.
moderate
Price to income
3.58×
The single most-cited 'is this market still cheap' check. Below 3× and you're in an affordability tailwind.
- vs Tennessee
- 3.49×
- vs U.S.
- 3.43×
Benchmark
ACS median home value ÷ median HHI
comfortable
Rent to income
24.3%
What share of a typical household's income goes to rent. Below 30% means tenants can absorb modest rent increases.
- vs Tennessee
- 24.3%
- vs U.S.
- 23.3%
Benchmark
(HUD FMR 2BR × 12) ÷ median HHI
deal-by-deal
Cap rate proxy
4.4%
Rough first-pass yield assuming a 35% expense ratio. Not an underwriting number — a 'is this even worth modeling' filter.
- vs Tennessee
- 4.4%
- vs U.S.
- 4.3%+0.1
Benchmark
(FMR 2BR × 12 × 0.65) ÷ ACS median home value
steady
Net migration
+0.27%
Forward-looking demand signal. Positive net migration drives rent growth and absorbs new supply.
- vs Tennessee
- 0.15%+0.13
- vs U.S.
- 0.03%+0.24
Benchmark
IRS net migration ÷ population
pipeline growing
Permit pipeline
5.47
permits per 1,000 residents
Forward-supply indicator. Above ~5 means the metro is building meaningfully relative to its size; below 2 means supply is tight.
- vs Tennessee
- 5.07+0.39
- vs U.S.
- 3.52+1.94
Benchmark
Census BPS permits TTM ÷ population × 1,000
healthy
Unemployment
3.2%
Tighter unemployment means higher wages, more rental demand, lower vacancy.
- vs Tennessee
- 3.4%-0.2
- vs U.S.
- 3.9%-0.7
Benchmark
BLS LAUS, latest month
Section index — click any row to jump
What the data says about Chattanooga
Chattanooga is the two-state metro building at a pace that most Sun Belt cities would envy — and the entry price is still reachable. The metro stretches across 6 counties split between Tennessee and Georgia, holds 564,466 residents, and the FHFA House Price Index has climbed 65.9% over five years per the Federal Housing Finance Agency, outpacing both the Tennessee metro average and the U.S. metro average. That appreciation sits on a $246,000 median home value and a $68,666 median household income, producing a 3.58x price-to-income ratio — essentially at the Tennessee and national medians. The cap rate proxy runs 4.4%, which is deal-by-deal territory. BLS unemployment is 3.2% (Bureau of Labor Statistics LAUS), and the metro pulled 3,085 building permits in the trailing twelve months per the Census Building Permits Survey — 5.47 per 1,000 residents, well above the national median of 3.52.
The construction story is dominated by one county with a Georgia-side supporting cast.
- Hamilton County (TN) is the metro's engine — 367,193 residents, 1,995 permits TTM (65% of the metro total), up +12.7% YoY. Median home value runs $282,100 on a $72,568 HHI. Chattanooga proper, Signal Mountain, and the Tennessee River corridor all sit here.
- Catoosa County (GA) is the suburban spillover: 68,052 residents, 578 permits but cooling at -25.2% YoY. The highest Georgia-side HHI ($72,425) suggests this is where Tennessee commuters buy.
- Walker County (GA) holds 68,065 residents and 281 permits at -6.6% YoY. The lowest median home value in the metro ($173,900) makes it the affordable entry point across the state line.
- Marion County (TN) is the small-county growth story: 207 permits, up +16.9% YoY on 28,852 residents. Affordable ($173,600 median) with room to build.
- Dade and Sequatchie counties combine for just 24 permits on 32K residents — rural fringes that don't move the metro needle.
- The permit mix runs 73% single-family (2,242 units), with a meaningful 585 units in the 5+ multifamily category — more multifamily activity than many peers, reflecting Chattanooga's evolving rental market.
What's changing: net migration landed at +1,535 returns in the most recent IRS Statistics of Income vintage — +0.27% of metro population, nearly 10x the national median. The top origin counties are internal (Hamilton, Catoosa, Walker), but Bradley County, TN (656 returns) and Davidson County, TN (296 returns) — Nashville — show up as external feeders. This is a metro absorbing cost-of-living refugees from its own state capital. Unemployment at 3.2% runs below both the Tennessee state median (3.4%) and the national median (3.9%). The HUD Fair Market Rent of $1,390/month for a 2BR (HUD FMR) against that $68,666 HHI produces a 24.3% rent-to-income ratio — comfortable, but only just.
So what does an investor do with this?
- If you're hunting cash flow, Chattanooga is a stretch. The 4.4% cap rate proxy is deal-by-deal — you need to find properties below the $246,000 median, likely in Walker County ($173,900) or Marion County ($173,600), to hit workable NOI numbers.
- If you're playing appreciation, the trend is strong. 65.9% over five years leads the peer group. Hamilton County is the safest bet — the +12.7% permit growth, tight unemployment, and Nashville migration pipeline all support continued price gains, even as the YoY pace moderates to 3.6%.
- If you already own here, hold and build. The supply pipeline at 5.47 per 1,000 is above average but still digestible for a growing metro. The 585-unit multifamily pipeline suggests rental competition is increasing — watch your vacancy rate (currently 9.6%) and adjust rents to stay ahead of new supply in Hamilton County.
Where prices are and where they've been
FHFA House Price Index — repeat-sales index across the metro, sized against this metro's median household income and benchmarked against the Indiana metros average and U.S. metros average.
5-year price appreciation
+65.9%
FHFA HPI · Q1 2020 → Q4 2025
+3.6% YoY
$246,000 median home value
Chattanooga home prices climbed 65.9% over the last 5 years according to the FHFA repeat-sales index — a strong appreciation pace for a Midwest metro of this size. The 1-year change of 3.6% suggests steady appreciation continuing.
See the chart below for how the metro's appreciation curve stacks up against the Indiana metros average and the U.S. metros average. The gap between the metro and the national line is the "catch-up" or "lag" signal — and the slope tells you whether the gap is widening or closing.
How to read it
- 01Chattanooga's HPI gained **65.9%** over five years — outpacing both the Tennessee metro average and the U.S. metro average by a wide margin.
- 02The teal line runs above the state (blue) and national (dashed) curves through the entire period — Chattanooga has led since 2020.
- 03The sharpest climb ran from Q1 2021 through Q2 2022, when the index jumped from **256.70 to 339.21** — a 32% surge in six quarters.
- 04Growth cooled in late 2024 — the index flattened from **398.77 (Q2 2024) to 399.25 (Q4 2024)** — before ticking back up to **413.64** by Q4 2025.
- 05Year-over-year HPI growth is **3.6%** — slower than the 2021-2022 sprint but still positive, and the gap over the national pace (2.4%) is widening.
Where the value tier sits — top 5 counties by home value
| County | Median home value | Median HHI | Price-to-income | Verdict |
|---|---|---|---|---|
| Hamilton County | $282,100 | $72,568 | 3.89× | moderate |
| Sequatchie County | $217,800 | $52,260 | 4.17× | moderate |
| Catoosa County | $214,200 | $72,425 | 2.96× | affordable |
| Walker County | $173,900 | $55,887 | 3.11× | moderate |
| Marion County | $173,600 | $58,103 | 2.99× | affordable |
How to read the FHFA House Price Index
FHFA HPI is a repeat-sales index — it tracks the price change of the same properties over time, smoothing out new construction and luxury transactions. It's built from the mortgage data the GSEs (Fannie Mae, Freddie Mac) already see, which makes it free of MLS survey error and immune to listing-feed gaps.
- 01Repeat-sales method. Tracks the same properties over time, so new construction and luxury transactions don't skew the trend.
- 02Federally sourced. Built from GSE mortgage data — no MLS survey error, no commercial license required to publish.
- 03Slope, not level. Watch the slope of the line, not the absolute index value — a steepening curve is a more reliable buy signal than the level.
The rent ladder
HUD Fair Market Rent by bedroom count, sized against this metro's median household income and benchmarked vs Indiana and the U.S.
Typical 2-bedroom rent
$1,390
/ month · HUD FMR FY 2026
24.3% of median HHI
A typical 2-bedroom in costs the median household 24.3% of their income — 1.0 points above the U.S. average (23.3%) right at Tennessee (24.3%).
HUD calls anything above 30% "rent-burdened." This metro sits comfortably under that line, which means tenants can absorb modest rent increases — and landlords have headroom on rent hikes before pushing tenants out of the market.
Fair Market Rent — by bedroom count
| Bedroom | Monthly | Annual | % of median HHI | Verdict |
|---|---|---|---|---|
| 1 BR | $1,263 | $15.2K | 22.1% | comfortable |
| 2 BR | $1,390 | $16.7K | 24.3% | comfortable |
| 3 BR | $1,734 | $20.8K | 30.3% | rent-burdened |
Why HUD Fair Market Rent matters
FMR is HUD's 40th-percentile rent estimate by bedroom count — refreshed every fiscal year, sourced from Census surveys (not commercial listing data), and used as the cap for Section 8 voucher payments. Three things investors should know:
- 01Defensible benchmark. Federal source, no commercial license required to publish or compare against.
- 02Section 8 ceiling. A property at or below FMR is voucher-eligible — government-paid rent at the FMR cap.
- 03Conservative estimate. 40th percentile means more than half of actual market rents in the metro come in higher.
Labor market direction
U.S. Bureau of Labor Statistics — LAUS (unemployment) + CES (nonfarm employment), benchmarked against the U.S. average.
Unemployment rate
3.2%
BLS LAUS · latest month
Chattanooga's labor market is healthy, with unemployment running at 3.2% — 0.7 points below the U.S. metros average (3.9%).
For an investor, tighter unemployment means higher wages, more rental demand, and lower vacancy. The trend chart below shows how the metro's unemployment has moved over the last 30 months.
Unemployment rate
3.2%
Nonfarm jobs
—
Median household income
$68,666
ACS 5-year
How to read the labor market
Two BLS series tell you almost everything you need about a metro's labor market: LAUS (unemployment, refreshed monthly) and CES (nonfarm payroll counts, refreshed monthly). LAUS is the tightness signal; CES is the size and direction signal.
- 01Unemployment is rental demand. Tighter labor markets mean higher wages and lower vacancy — landlords have pricing power when employers are competing for workers.
- 02YoY change is the trend signal. A negative pp YoY change means the labor market tightened over the last year — usually a leading indicator for rent growth.
- 03Nonfarm growth is supply absorption. Positive nonfarm payroll growth absorbs new housing supply and supports the rent + price trajectory together.
What's being built
U.S. Census Bureau, Building Permits Survey — trailing 12 months, broken out by structure type, with the YoY change as the directional signal.
Total permits TTM
3,085
Census BPS · trailing 12 months
+5.2% year-over-year
5.47 permits per 1,000 residents
Chattanooga pulled 3,085 building permits over the trailing 12 months, a modest expansion 5.2% year-over-year. That works out to 5.47 permits per 1,000 residents, vs the U.S. metros average of 3.52.
Single-family vs multifamily mix matters: 5+ unit permits are lumpy (developers file for entire projects at once), while single-family permits are smoother and more reliable as a demand signal. The chart below breaks out the monthly mix.
Single family
2,242
trailing 12 months
2–4 unit
258
trailing 12 months
5+ unit
585
trailing 12 months
How to read the supply pipeline
Census BPS publishes building permit counts every month at the county level, by structure type. Single-family permits are the smooth signal — they reflect ongoing builder demand. 5+ unit permits are lumpy and project-level — one apartment approval can spike a month.
- 01Permits per 1,000 residents. The size-adjusted comparison number. Above ~5 means the metro is building meaningfully relative to its population; below 2 means supply is tight.
- 02YoY change is the direction. Year-over-year change in TTM permits tells you whether builders are leaning in or pulling back. Watch this number for trend reversals.
- 03Mix matters for cap rates. Heavy 5+ unit permitting tends to compress cap rates; single-family-dominated pipelines preserve them.
All 6 counties, ranked by population
Census Bureau (population, ACS demographics) + Census Building Permits Survey.
How to read it
- 01Hamilton County dominates with **1,995 permits** — **65% of the metro total** — up **+12.7% YoY**. This is where Chattanooga proper sits, and where all the institutional interest concentrates.
- 02Catoosa County (GA) pulled **578 permits** but is cooling — down **-25.2% YoY**. The median home value of $214,200 on a $72,425 HHI makes it the most expensive Georgia-side county relative to income.
- 03Walker County (GA) adds **281 permits** at a modest **-6.6% YoY** decline. The lowest median home value in the metro ($173,900) makes it a value play across the state line.
- 04Marion County (TN) is the small-county growth story: **207 permits**, up **+16.9% YoY** — the only Tennessee county outside Hamilton showing acceleration.
- 05Dade and Sequatchie counties combine for just **24 permits** — rural fringes contributing less than 1% of metro activity.
How to read the map
- 01Hamilton County (darkest shade) anchors the metro's center with **1,995 permits** — the urban core where Chattanooga proper, the Tennessee River corridor, and Signal Mountain drive development.
- 02Catoosa County (medium shade) sits across the Georgia border to the south with **578 permits** — the suburban spillover from Hamilton that pulls Georgia commuters.
- 03Walker County (lighter shade) flanks Catoosa to the southwest with **281 permits** — affordable Georgia-side housing that draws first-time buyers priced out of Hamilton.
- 04The TN-GA state line bisects the metro — 3 Tennessee counties to the north, 3 Georgia counties to the south, with the construction gradient clearly shifting as you move away from Hamilton.
- 05Dade and Sequatchie counties (lightest shading) mark the rural fringes — combined **24 permits** on 32K residents, visible as the thin periphery on the map's edges.
| # | County | Population | Median HHI | Home value | Permits TTM | YoY |
|---|---|---|---|---|---|---|
| 1 | Hamilton County | 367,193 | $72,568 | $282,100 | 1,995 | +12.7% |
| 2 | Walker County | 68,065 | $55,887 | $173,900 | 281 | |
| 3 | Catoosa County | 68,052 | $72,425 | $214,200 | 578 | |
| 4 | Marion County | 28,852 | $58,103 | $173,600 | 207 | +16.9% |
| 5 | Dade County | 16,239 | $58,936 | $166,600 | 13 | +333.3% |
| 6 | Sequatchie County | 16,065 | $52,260 | $217,800 | 11 |
Similar metros nationally
5 metros closest to Chattanooga by population and median household income — head-to-head on the metrics that matter for an investor.
Peer set
5
metros nearest by population + HHI
Chattanooga is closest in size to Lansing, Spokane, Scranton, Augusta.
The table below ranks every metric — green cells mark the best value in the column, rust cells mark the worst. Chattanooga is highlighted as the focal row.
| Metro | Pop | Med HHI | Home value | P/I | Cap proxy | HPI 5y | Permits/1k | Migration | Unemp |
|---|---|---|---|---|---|---|---|---|---|
★Chattanooga | 0.56M | $69K | $246K | 3.58× | 4.4% | +65.9% | 5.47 | +0.27% | 3.2% |
Lansing-East Lansing, MI | 0.54M | $71K | $205K | 2.90× | 4.8% | +49.3% | 1.68 | -0.14% | 4.4% |
Spokane-Spokane Valley, WA | 0.59M | $73K | $366K | 5.02× | 3.3% | +47.2% | 5.10 | +0.34% | 5.2% |
Scranton--Wilkes-Barre, PA | 0.57M | $64K | $177K | 2.77× | 5.5% | +59.8% | 1.08 | +0.19% | 4.3% |
Augusta-Richmond County, GA-SC | 0.61M | $67K | $207K | 3.11× | 4.7% | +59.6% | 6.23 | +0.11% | 4.3% |
Lexington-Fayette, KY | 0.52M | $71K | $259K | 3.66× | 3.8% | +59.0% | 4.43 | -0.17% | 2.9% |
How to read this comparison
Peer metros are picked by population + median household income — the closest five matches nationally — so the comparison is apples-to-apples on size and economic class. Sun Belt entrants like Las Vegas and Nashville are included when they fall in range, which is why this peer set spans both the Midwest and the Sun Belt.
- 01Green = best in column. The cell with the most-favorable value for that metric, accounting for whether higher or lower is better.
- 02Rust = worst in column. The cell with the least-favorable value. Combined with the green markers, this is your at-a-glance "where does my metro win and where does it lose."
- 03Cap proxy is the yield lens. Cap rate proxy = (FMR 2BR × 12 × 0.65) ÷ median home value. A first-pass yield filter, not an underwriting number — but it puts the peer set on a single comparable scale.
Where people are moving in from
IRS Statistics of Income — Tax Year 2022. Excludes intra-metro suburban churn.
Net migration
+1,535
tax returns · IRS SOI · TY 2022
+0.27% of metro population
1,764 from top origin
Chattanooga absorbed a net +1,535 tax returns in the most recent IRS vintage — a +0.27% inflow relative to metro population. The top feeders are internal (Hamilton, Catoosa, Walker counties churning between themselves) and neighboring Bradley County, TN. Davidson County (Nashville) contributes 296 returns — a trickle of capital migrating south from the state's priciest metro.
The IRS data lags by ~2 years (households file taxes the year after they move), but it's the only nationwide county-to-county migration data sourced from administrative records, not survey estimates. The table below shows the top origin counties — the gravitational sources of new residents.
Top origin counties — where new residents are coming from
| Origin county | Tax returns |
|---|---|
| Hamilton County, TN | 1,764 |
| Catoosa County, GA | 1,124 |
| Walker County, GA | 911 |
| Bradley County, TN | 656 |
| Whitfield County, GA | 436 |
| Davidson County, TN | 296 |
Who lives in Chattanooga
U.S. Census Bureau · American Community Survey 5-Year Estimates · 2019–2023 vintage.
Who lives here
- Median age
- 40.4
- Owner-occupancy
- 68.3%
- Bachelor's+
- 31.3%
Chattanooga mature Midwest metro: Median age 40.4, 68.3% owner-occupancy 31.3% holding a bachelor's degree or higher. Stable, educated, and mostly homeowner-driven.
The catch: 42.6% of renter households are rent-burdened (paying 30%+ of income on rent) — high enough to flag as a constraint on rent growth even though the headline rent-to-income ratio looks comfortable.
- Median household income
- $68,666
- Median age
- 40.4
- Bachelor's+ degree
- 31.3%
- Owner-occupancy rate
- 68.3%
- Vacancy rate
- 9.6%
- Rent burdened (30%+)
- 42.6%
Data sources
| Metric | Source | Type | Vintage |
|---|---|---|---|
| Home prices | FHFA — House Price Index | Index | Q4 2025 |
| Fair market rents | HUD — Fair Market Rents | Administrative | FY 2026 |
| Unemployment rate | BLS — Local Area Unemployment Statistics | Survey | Jan 2026 |
| Nonfarm employment | BLS — Current Employment Statistics | Survey | Jan 2026 |
| Building permits | Census — Building Permits Survey | Survey | Mar 2026 TTM |
| Migration flows | IRS — Statistics of Income, Migration Data | Administrative | Tax Year 2022 |
| Demographics | Census — American Community Survey 5-Year | Survey | 2019–2023 |
| Household income | Census — American Community Survey 5-Year | Survey | 2019–2023 |
Page last refreshed: April 10, 2026