Real Estate Radar: Why Louisville is a Dream for First-Time Homebuyers
You may know Louisville for its rich history, famous horse races, and bourbon revival, but the city is also a hidden gem for first-time homebuyers. The local real estate market is known for its relative affordability and diverse array of neighborhoods, from classic old homes to new developments.
"People moving here are often surprised and excited about how far their money will go," says Shelly Glenn, Old National Mortgage Sales Manager. The city's median home price is $275,000, which is 38% lower than the national average.
Still, Glenn says the housing market remains competitive. For first-time buyers, understanding what you can afford and the steps you need to prepare can ensure your offer turns into a smart purchase.
A super-charged economy
Many well-known companies call Louisville home, including UPS, GE Appliances, Ford Motor Company, Yum! Brands, and Humana. The city's economic development department notes that Louisville is in the midst of an economic renaissance, as many of these big names embark on local expansions and increased hiring.
For example, Ford recently announced it is expanding the square footage of its Louisville Assembly Plant as part of a $1.2 billion investment in electric vehicle production. GE is also investing nearly $500 million in its local laundry machine plant in Louisville. The company reports that the expansion will generate 800 jobs in the area.
Healthcare and medical science are other heavy-hitting industries in the region. Norton Healthcare announced that it is building a new pediatric hospital near the intersection of Interstates 264 and 65. "Louisville is an economic powerhouse not just in one area, but in many facets of the economy," Glenn says.
A well-rounded real estate market
Kentucky's largest city offers something for every buyer, from urban neighborhoods with renovated homes to suburban developments featuring parks and pools. While the metro area's median home price is much lower than the national average, it did increase by 5.9% from last year. And, much like other areas of the country, Louisville remains a seller's market, with homes selling in an average of 29 days and multiple offers still common.
"We're still seeing inventory shortages, which means the market is competitive," Glenn says. "But that's all the more reason for first-time homebuyers to do their homework."
Glenn highlighted several neighborhoods and areas that appeal to new buyers, such as St. Matthews, Lyndon, and Douglas Hills. These and other eastside enclaves offer quick commutes into downtown Louisville, abundant retail and restaurant options, and home prices hovering around $300,000.
Closer to the city, up-and-coming neighborhoods like Butchertown and Germantown feature bustling nightlife, art galleries, boutiques, and restaurants, along with affordable condos and older homes that many buyers opt to renovate.
4 steps for real estate success in Louisville
Glenn has counseled numerous first-time homebuyers and witnessed how a little preparation before the shopping process begins can go a long way. Here is Glenn's best guidance for finding a first home that fits with your budget and meets your needs in Louisville.
1. Start with a financial deep dive. It's not uncommon for first-time homebuyers to get approved for the maximum mortgage payment they can afford. "But that's not always the best approach," Glenn says. "Instead, you want to know what you're comfortable spending and how it impacts your life."
That's why Glenn recommends that first-time buyers create a budget before meeting with a lender. You want to understand your monthly spend, your savings goals, and where a mortgage payment fits into your overall financial plan. "Then you can work with a lender to back into a manageable payment that you can sustain," Glenn says. She adds that practicing making a payment before you have a mortgage provides additional comfort that the expense is manageable for the long term.
2. Get pre-qualified for a loan2. In Louisville's competitive real estate market, a pre-qualified mortgage can make a big difference. Find a local lender, such as Old National, who can help determine the range of loan amounts and monthly payments that fit with your budget. "With pre-qualification, you have an idea of what you're spending and you've already made a connection with a financial institution," Glenn says. "That takes some of the stress out of buying." Pre-qualification can also help determine which neighborhoods are financially feasible and which types of houses align with your price range.
3. Explore your mortgage options. There are multiple mortgage products designed for all types of homebuyers, from loans tailored to individuals in specific professions to mortgages that include funds for renovation projects, as well as programs for first-time buyers. Talk to your lender about all of the loans available and whether the benefits can accelerate your path to home ownership.
For example, some programs provide down payment assistance. Glenn notes that today's buyers are also more conscious of interest rates. "For first-time buyers, I always recommend equating your house payment to your rent in terms of monthly expense," she says. "However, your payment is helping build your wealth rather than someone else's."
4. Leverage local expertise. Working with lenders, real estate agents, appraisers, and title companies that have deep knowledge of Louisville and the surrounding areas can give first-time buyers a significant advantage. Not only will your local lender have a good sense of the market and prices, but they often have relationships with other real estate professionals. For example, they may know an agent with expertise in a specific area or a title company that's known for efficient closings. "Buying a home is one of the most significant investments most people will make," Glenn says. "Having a relationship with a professional to help you navigate the process can help you be more successful."
Louisville offers first-time homebuyers affordable options for launching a lifetime of homeownership. By researching the market and preparing yourself financially for the homebuying process, you can ensure that your Derby City dreams come true.
Interested in how Old National can help you purchase a home in Louisville? Connect with our mortgage team today.
1All loans are subject to credit review and approval. Property insurance required for all loans secured by real estate. Rates are subject to change daily. Contact your Old National Banker or Residential Lender for current loan rates. NMLS #459308
