Rainbow Terrace, a neighborhood in Nashville-Davidson metropolitan government, Tennessee, exhibits characteristics of a Black Plurality community with moderate diversity as of 2022. The neighborhood has a population of 391 and a median income of $48,442. Rainbow Terrace has undergone significant demographic and economic changes over the past decade, reflecting broader shifts in urban neighborhoods across the United States.

From 2013 to 2022, Rainbow Terrace transitioned through several diversity categories. From 2013 to 2016, the neighborhood was a White Majority community, with the white population consistently above 50%. From 2017 to 2019, it shifted to a Moderate Diversity category, with no racial group exceeding 50% but significant representation from white, black, and Hispanic populations. From 2020 to 2022, the community evolved into a Black Plurality, with the black population becoming the largest group (51% in 2022) but not exceeding the majority threshold in most years. This transition suggests a gradual increase in racial diversity.

The median income in Rainbow Terrace has shown a notable upward trend. From 2013 to 2017, income levels were relatively stable, ranging from $24,723 to $32,136. From 2018 to 2022, a significant increase occurred, with median income rising from $41,429 to $48,442, peaking at $66,094 in 2021. This economic growth correlates with the demographic shifts, suggesting a link between increasing diversity and improved economic conditions in the neighborhood.