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Average Home Values and Ownership in Zip Code 40503: A Decade of Growth in Lexington-Fayette
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Zip code 40503, located in Lexington-Fayette, Kentucky, has experienced significant shifts in homeownership rates and property values over the past decade. This area, known for its proximity to the University of Kentucky and its vibrant suburban atmosphere, has seen a general trend of increasing homeownership and rising average home prices, with some fluctuations in recent years.
From 2013 to 2019, the zip code witnessed a steady increase in homeownership rates, rising from 66% to 71%. This upward trend coincided with a substantial growth in average home prices, which rose from $167,900 in 2013 to $219,315 in 2019, representing a 30.6% increase over six years. The positive correlation between homeownership rates and average home prices suggests a strong demand for housing in this area during this period.
The relationship between federal interest rates and homeownership rates in zip code 40503 follows a generally expected pattern. As interest rates remained low from 2013 to 2016, hovering between 0.09% and 0.40%, homeownership rates increased from 66% to 67%. This trend continued as interest rates gradually rose to 2.16% by 2019, with homeownership peaking at 71%. The sustained low interest rate environment likely contributed to increased affordability and encouraged home buying in the area.
Renter percentages in zip code 40503 showed an inverse relationship to homeownership rates, decreasing from 34% in 2013 to 29% in 2019. Despite this decline in the renter population, average rent prices steadily increased from $1,015 in 2013 to $1,160 in 2019, a 14.3% rise. This trend suggests that even as more residents became homeowners, the rental market remained strong, possibly due to the area's desirability and proximity to the university.
In 2023 and 2024, zip code 40503 experienced continued growth in average home prices, reaching $307,052 in 2023 and $319,468 in 2024. This represents a significant 11.6% increase from 2022 to 2024. Notably, federal interest rates also rose sharply during this period, reaching 5.02% in 2023 and 5.33% in 2024, which may impact future homeownership trends in the area.
Looking ahead, predictive models suggest that average home prices in zip code 40503 are likely to continue their upward trajectory over the next five years, albeit at a potentially slower rate due to higher interest rates. Average rent prices are also expected to increase, driven by ongoing demand in the area and the overall trend of rising housing costs. However, the rate of increase may moderate as the market adjusts to economic conditions and housing supply changes.
In summary, zip code 40503 has demonstrated a robust housing market with increasing homeownership rates and rising property values over the past decade. The area has shown resilience in both its ownership and rental markets, with average home prices and rent consistently appreciating. While recent interest rate hikes may introduce new dynamics, the overall trend suggests continued growth in the local real estate market, albeit potentially at a more moderate pace in the coming years.
