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Mount Vernon, Kentucky: Rising Home Values and Shifting Ownership in Appalachian Foothills
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
Mount Vernon, Kentucky, is a small city located in Rockcastle County. With a population of 5,661 as of 2022, this charming community has experienced notable shifts in its housing market over the past decade. The city has seen fluctuations in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local market dynamics.
The homeownership rate in Mount Vernon has shown a gradual decline over the years, with some fluctuations. In 2013, the city boasted a 75% homeownership rate, which decreased to 65% by 2022. This downward trend coincides with a significant increase in average home prices. In 2011, the average home price was $55,076, which steadily climbed to $114,510 by 2022, representing a 108% increase over 11 years. This substantial rise in home values may have contributed to the declining homeownership rate, as affordability became a growing concern for potential buyers.
Federal interest rates have played a crucial role in shaping homeownership trends in Mount Vernon. The period from 2011 to 2016 saw historically low interest rates, ranging from 0.1% to 0.4%. During this time, homeownership rates remained relatively stable, hovering around 70-75%. However, as interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, homeownership rates showed a more pronounced decline, dropping to 65% by 2022. This inverse relationship demonstrates how higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
The rental market in Mount Vernon has experienced its own set of changes. The percentage of renters increased from 25% in 2013 to 35% in 2022, mirroring the decline in homeownership. Average rent prices have also seen an upward trend, rising from $499 in 2013 to $629 in 2022, a 26% increase over nine years. This growth in rent prices, while significant, has been less dramatic than the increase in home prices, potentially making renting a more attractive option for some residents.
In 2023 and 2024, Mount Vernon's housing market continued to evolve. The average home price reached $126,044 in 2023 and slightly increased to $126,345 in 2024, showing a stabilization in the market. Concurrently, federal interest rates climbed to 5.02% in 2023 and 5.33% in 2024, reaching levels not seen since before the 2008 financial crisis. These higher interest rates may continue to impact homeownership rates and market dynamics in the coming years.
Looking ahead, predictive models suggest that Mount Vernon's housing market may continue to see moderate growth. Average home prices are projected to increase by approximately 3-5% annually over the next five years, potentially reaching around $150,000 by 2029. Average rent prices are expected to follow a similar trajectory, with an estimated 2-4% annual increase, potentially reaching about $725 per month by 2029.
In summary, Mount Vernon has experienced a shift towards a more rental-oriented market over the past decade, with declining homeownership rates and rising home and rent prices. The interplay between federal interest rates, housing affordability, and local economic factors has shaped these trends. As the city moves forward, balancing housing affordability with market growth will be crucial for maintaining a diverse and thriving community.
