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Zip Code 40502: Rising Home Values and Stable Ownership in Lexington-Fayette's Dynamic Housing Market
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 40502, situated in Lexington-Fayette, Kentucky, has undergone notable changes in homeownership rates and housing prices over the past decade. This area, known for its proximity to the University of Kentucky and vibrant urban amenities, has experienced a complex interplay between ownership trends and property values.
The homeownership rate in zip code 40502 has maintained relative stability, fluctuating between 53% and 57% from 2013 to 2022. A slight upward trend has emerged in recent years, with the ownership rate increasing from 53% in 2015 to 56% in 2022. This trend coincides with a substantial increase in average home prices, which rose from $308,114 in 2015 to $445,888 in 2022, representing a 44.7% increase over seven years.
The relationship between federal interest rates and homeownership rates in this zip code reveals an interesting pattern. Despite historically low interest rates from 2013 to 2021, ranging from 0.08% to 1.83%, the homeownership rate remained relatively stable. This suggests that other factors, such as local economic conditions or housing supply, may have played a more significant role in influencing homeownership decisions in this area.
Renter percentages in zip code 40502 have shown a slight decrease, from 46% in 2015 to 44% in 2022. During this same period, average rent prices increased from $870 in 2015 to $977 in 2022, a 12.3% rise. The population in the zip code has remained relatively stable, growing from 28,710 in 2015 to 28,768 in 2022, which may have contributed to the steady demand for rental properties despite the increasing costs.
Looking at the most recent data, the average home price in zip code 40502 reached $482,405 in 2023 and further increased to $510,133 in 2024. This represents a significant 14.4% increase from 2022 to 2024. Concurrently, federal interest rates have risen sharply, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates could potentially impact future homeownership trends and property values in the area.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 40502 will continue to rise, potentially reaching around $600,000 by 2029. This projection is based on the consistent upward trend observed over the past decade and the area's desirable location. Average rent prices are also expected to increase, potentially reaching approximately $1,150 per month by 2029, reflecting the ongoing demand for rental properties in this urban area.
In summary, zip code 40502 has demonstrated resilience in its housing market, with steadily increasing home values and a slight upward trend in homeownership rates. The area has maintained a balanced mix of owners and renters, even as both home prices and rents have risen. The recent sharp increase in interest rates and continued growth in property values will likely shape the future of this market, potentially affecting affordability and homeownership trends in the coming years.
