Kentucky housing market

Is it a buyer’s or seller’s market in Kentucky?

It is considered a seller’s market right now. Housing inventory is up since last year, which means supply is less constrained. Mortgage rates are 6.8%, making the average house payment $1,862, which is $255 higher than a year before.

Total months of housing supply available for sale is 3.6 months, up 9.1% from 3.3 month(s) in January 2024.

Months of Supply

The Months of Supply housing metric is an estimate of how long it would take to sell all the homes for sale relative to the number of homes sold each month. Historically, 5 to 6 months is the average. You may also hear this metric referred to as the "absorption rate."

Lower months of housing supply typically signal a seller’s market whereas when months of supply is greater than 6 months typically signal a buyer’s market.

Sales to Listing Ratio

Sales to Listing Ratios are an indicator of supply and demand. It is all the completed sales in the past month divided by the total number of active listings.

In a balanced real estate market, the total number of home sales to active listings ratio is between 0.12 and 0.2 while markets with a ratio higher than 0.2 favors seller’s, as homes are selling fast and there is limited inventory, while markets below 0.12 favor home buyers because there is a larger supply of homes to purchase.

Selling a house in Kentucky

Home values have increased by 9.3% since last year, and the number of days it takes to sell a home has increased from 49 days in January 2024 to 57 days in January 2025.

The best time to sell your home in Kentucky is in June, when homes sell fastest and for the most money.

Sellers typically pay the commission of both the listing and buyer’s agents, which typically total 5-6% of the home sale price. That’s $15,912 paid in commission to the real estate agents. You’d also need to factor in closing costs, plus other fees and your mortgage payoff amount, to calculate the net proceeds from your home sale.

Buying a house in Kentucky

Homes in Kentucky have a median price of $265,200, which means you’ll need $26,520 for a 10% down payment. Housing costs have increased 9.3% in the past year. When you’re several months out and have your down payment saved, make sure to get pre-approved for a mortgage and find a real estate agent.

Home values are only one part of the home affordability equation. When buying a house in Kentucky, don’t forget to also account for closing costs, which are typically 3-4% of the home cost. In addition to a down payment of $26,520 you should have $10,608 as well as budget for cash reserves, moving expenses and ongoing homeownership costs for home maintenance and repairs or HOA fees.

Kentucky home values are 3.8% more expensive than Indiana and 65.1% cheaper than the national median home value.