The State of the Housing Market in Louisville, KY - 2025
As a home inspector and someone that is heavily involved in the real estate world, I like to keep up with the real estate market as it effects my business greatly. The market is not great for us home inspectors right now as less home sales equals less home inspections. So, what has caused this slow real estate market? Well, it ultimately comes back to there being a larger supply than demand. Housing prices are harder to afford than any other time in history in the US. While Louisville isn’t as bad as many major cities, the housing market has inflated to record highs, accompanied by high interest rates, many home buyers are simply priced out of the market.
Where do I see prices going in the future?
I don’t see the market crashing, maybe dropping a couple percent and becoming stagnant for a few years after that. During this time period, interest rates will likely slowly decrease. Now I don’t imagine rates will ever get below 3% again like we were spoiled with in 2020. I believe it is most likely that interest rates will settle around 5%.
How has this effected home inspections?
Obviously there has been less home inspections overall but this current market has made an impact on our industry. The first major thing I’ve noticed is a lot of sellers are getting inspections done before selling their house to offer as an incentive to buyers so they don’t have to or so they can make a list of necessary repairs to increase their homes value. A buyer may be wary of relying on a home inspection report done by the seller as they may be concerned on if the report is biased and purposely left things out. The other thing I’ve noticed in the Louisville market is more home buyers going the route of new construction and the main reason for this is because most home builders offer a lower interest rate with their preferred lender. Just a 1% lower interest rate could save you hundreds month to month on your mortgage.
Overall, the housing market is not in a great place but this slower market was definitely necessary to slow the insane inflation rate of the past few years. Yes houses are as unaffordable as ever but it you look back at the history of the housing market in the united states, there’s no time that a given house was cheaper then, than 10 years prior. So, I believe owning is still a great investment if you are thinking long term, it just may take a few years before you see significant equity being built.
