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Owensboro's Rising Home Values and Shifting Ownership Patterns: A Decade of Change in Kentucky's Bluegrass City
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
Owensboro, Kentucky, located along the scenic Ohio River, is a vibrant city known for its rich bluegrass music heritage and as the "Barbecue Capital of the World." With a population of 71,103 in 2022, this charming city has experienced steady growth and evolving housing dynamics over the past decade. Homeownership rates have slightly declined from 62% in 2013 to 60% in 2022, while average home prices have shown a significant upward trend. Concurrently, average rent prices have also increased, reflecting the city's changing real estate landscape.
The relationship between homeownership rates and average home prices in Owensboro presents an interesting trend. In 2013, when 62% of residents owned their homes, the average home price was $98,896. As homeownership declined slightly to 60% by 2022, average home prices rose substantially to $175,341, marking a 77.3% increase over this period. This inverse relationship suggests that rising home prices may have made homeownership less accessible for some residents, despite the city's overall growth.
Federal interest rates have played a crucial role in shaping Owensboro's homeownership trends. The period from 2013 to 2016 saw historically low interest rates, ranging from 0.11% to 0.40%, which coincided with stable homeownership rates of 61-62%. However, as interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), homeownership rates dipped slightly to 59-60%. This trend aligns with the general principle that lower interest rates tend to encourage homeownership due to more affordable financing options.
The rental market in Owensboro has shown a corresponding trend to the homeownership decline. The percentage of renters increased from 38% in 2013 to 40% in 2022. During this same period, average rent prices rose from $715 in 2013 to $860 in 2022, a 20.3% increase. This rise in both renter percentage and rent prices suggests growing demand for rental properties, possibly driven by those priced out of the homeownership market and the city's expanding population, which grew by 6.7% from 2013 to 2022.
In 2023 and 2024, Owensboro's housing market continued its upward trajectory. The average home price reached $185,650 in 2023 and further increased to $192,546 in 2024, representing a 9.9% rise over these two years. This growth occurred despite a significant increase in federal interest rates, which stood at 5.02% in 2023 and 5.33% in 2024, potentially impacting affordability for prospective homebuyers.
Looking ahead, based on the historical trends and current market conditions, we can project continued growth in both home prices and rent in Owensboro over the next five years. Average home prices could potentially reach around $225,000 by 2029, assuming a moderate annual growth rate of 3-4%. Similarly, average rent prices might increase to approximately $950-$1,000 per month, reflecting ongoing demand and the city's steady population growth.
In summary, Owensboro's housing market has demonstrated resilience and growth, with rising home values and rent prices despite slight decreases in homeownership rates. The interplay between federal interest rates, population growth, and housing affordability continues to shape the city's real estate landscape. As Owensboro moves forward, balancing housing accessibility with economic growth will be crucial for maintaining its appeal as a desirable place to live in Kentucky.
