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Home Values and Ownership Trends in Zip Code 40509: A Decade of Growth in Lexington-Fayette, Kentucky
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 40509, located in Lexington-Fayette, Kentucky, has experienced significant growth and change over the past decade. This area has seen a general trend of increasing homeownership rates, rising average home prices, and fluctuating average rent prices. The zip code's unique characteristics have contributed to its evolving real estate landscape.
From 2013 to 2022, the homeownership rate in zip code 40509 showed an overall upward trend, increasing from 59% to 62%. During this same period, average home prices rose substantially, from $199,277 in 2013 to $338,470 in 2022, representing a 69.8% increase. This correlation suggests that as property values increased, more residents were able to or chose to invest in homeownership. For instance, in 2017, when the homeownership rate reached 60%, the average home price was $229,908. By 2020, as homeownership peaked at 64%, average home prices had climbed to $263,659.
The relationship between federal interest rates and homeownership rates in this zip code appears to follow the general economic principle that lower interest rates encourage homeownership. For example, from 2013 to 2016, when interest rates were extremely low (ranging from 0.11% to 0.40%), homeownership rates remained stable at 59%. As interest rates began to rise more significantly in 2017 (1.00%) and 2018 (1.83%), homeownership actually increased to 60% and 61% respectively, possibly due to anticipation of future rate hikes encouraging buyers to enter the market.
Renter percentages in zip code 40509 have generally decreased as homeownership increased, dropping from 40% in 2013 to 38% in 2022. Average rent prices, however, have shown more volatility. In 2013, the average rent was $1,212, which decreased to $1,162 in 2015 before rising again to $1,232 in 2017 and 2018. By 2022, the average rent had settled at $1,176. This fluctuation in rent prices could be attributed to changes in housing supply and demand, as the population of the zip code grew from 34,930 in 2013 to 45,868 in 2022, a 31.3% increase.
In 2023 and 2024, average home prices in zip code 40509 continued their upward trajectory, reaching $354,714 in 2023 and $366,404 in 2024. This represents a 4.8% and 3.3% year-over-year increase respectively. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, which could potentially impact future homeownership rates and housing market dynamics.
Looking ahead, predictive models suggest that average home prices in zip code 40509 may continue to rise over the next five years, albeit at a potentially slower rate due to higher interest rates. Average rent prices are expected to follow a similar trend, increasing moderately as population growth continues to drive demand for housing in the area.
In summary, zip code 40509 has demonstrated a strong trend towards increased homeownership and rising property values over the past decade. The area has shown resilience in its housing market, with consistent growth in average home prices despite fluctuations in interest rates and economic conditions. The interplay between homeownership rates, average home prices, and rent prices reflects the dynamic nature of this growing urban county area in Kentucky.
