Home prices have surged in the U.S. in recent years. Driven by rising demand and supply constraints during the pandemic, the median home sale price spiked by nearly 50% from the second quarter of 2020 to Q3 in 2022. While the sale price of a typical American home has fallen in recent months since, housing prices remain at historic highs.

Not only have home values soared, but borrowing costs for home buyers have also climbed. The average interest rate on a 30-year fixed mortgage has been above 6% since September 2022, a high not seen in nearly a decade and a half. In a market defined by high prices and high mortgage rates, homeownership has become prohibitively expensive for a large number of Americans.

Still, housing prices are also subject to a number of factors that can be isolated from broader, nationwide market trends — and location is one of them. Two homes that are virtually identical can vary in price by hundreds of thousands of dollars, depending on where they are. And for prospective homeowners on a budget, some Kentucky cities are far more affordable than others.

According to five-year estimates from the U.S. Census Bureau’s 2022 American Community Survey, the typical home in Kentucky is worth $177,000. But across the 16 cities, towns and unincorporated communities in the state with populations of at least 25,000, median home values range from $130,500 to nearly $250,000.

In any local market, home prices are often a reflection of what residents can afford. In Kentucky, many of the least expensive cities for homebuyers are not high-income areas. Of the 16 Kentucky cities with available data from the ACS, six have a median home value that is less than the statewide median. In each of these places, the typical household earns less than the statewide median household income of $60,183. Similarly, most of Kentucky’s more expensive housing markets have higher earning populations.

Why It Matters

Homeownership is one of the most practical ways to build wealth in the United States, and rising borrowing costs and home values are pricing out a growing share of the population. The state of the U.S. housing market also has broader economic implications. According to the Congressional Research Service, spending associated with homeownership totaled $1.1 trillion in 2021, or nearly 5% of U.S. gross domestic product.

These are the cheapest and most expensive housing markets in Kentucky.

16. Hopkinsville

• Median home value: $130,500
• Homes worth over $1 million: 0.0%
• Homeownership rate: 46.4%
• Median household income: $43,577
• Total population: 31,042

15. Henderson

• Median home value: $144,200
• Homes worth over $1 million: 0.0%
• Homeownership rate: 53.4%
• Median household income: $46,276
• Total population: 28,166

14. Owensboro

• Median home value: $151,800
• Homes worth over $1 million: 0.2%
• Homeownership rate: 57.1%
• Median household income: $51,982
• Total population: 60,019

13. Paducah

• Median home value: $152,600
• Homes worth over $1 million: 1.0%
• Homeownership rate: 53.7%
• Median household income: $46,984
• Total population: 26,869

12. Covington

• Median home value: $153,600
• Homes worth over $1 million: 0.9%
• Homeownership rate: 51.4%
• Median household income: $53,770
• Total population: 40,923

11. Frankfort

• Median home value: $157,300
• Homes worth over $1 million: 0.2%
• Homeownership rate: 48.0%
• Median household income: $53,905
• Total population: 28,460

10. Richmond

• Median home value: $178,100
• Homes worth over $1 million: 0.4%
• Homeownership rate: 38.4%
• Median household income: $45,457
• Total population: 34,883

9. Florence

• Median home value: $181,500
• Homes worth over $1 million: 0.2%
• Homeownership rate: 56.6%
• Median household income: $67,352
• Total population: 32,056

8. Nicholasville

• Median home value: $189,500
• Homes worth over $1 million: 0.0%
• Homeownership rate: 61.9%
• Median household income: $61,832
• Total population: 31,352

7. Louisville/Jefferson County

• Median home value: $204,800
• Homes worth over $1 million: 1.3%
• Homeownership rate: 60.4%
• Median household income: $63,114
• Total population: 629,176

6. Elizabethtown

• Median home value: $207,800
• Homes worth over $1 million: 0.2%
• Homeownership rate: 48.3%
• Median household income: $54,493
• Total population: 31,425

5. Bowling Green

• Median home value: $215,300
• Homes worth over $1 million: 1.2%
• Homeownership rate: 37.9%
• Median household income: $47,118
• Total population: 72,385

4. Georgetown

• Median home value: $223,700
• Homes worth over $1 million: 0.4%
• Homeownership rate: 65.4%
• Median household income: $74,530
• Total population: 37,510

3. Independence

• Median home value: $225,500 (tied)
• Homes worth over $1 million: 0.9%
• Homeownership rate: 81.0%
• Median household income: $92,355
• Total population: 28,722

2. Jeffersontown

• Median home value: $225,500 (tied)
• Homes worth over $1 million: 0.3%
• Homeownership rate: 67.5%
• Median household income: $78,929
• Total population: 28,796

1. Lexington-Fayette

• Median home value: $247,900
• Homes worth over $1 million: 1.9%
• Homeownership rate: 54.3%
• Median household income: $66,087
• Total population: 321,276

Rank	Places in Kentucky with at least 25,000 residents	Median home value ($)	Homeownership rate (%)	Median household income ($)	Total Population
1	Lexington-Fayette	247,900	54.3	66,087	321,276
2	Independence	225,500	81.0	92,355	28,722
3	Jeffersontown	225,500	67.5	78,929	28,796
4	Georgetown	223,700	65.4	74,530	37,510
5	Bowling Green	215,300	37.9	47,118	72,385
6	Elizabethtown	207,800	48.3	54,493	31,425
7	Louisville/Jefferson County	204,800	60.4	63,114	629,176
8	Nicholasville	189,500	61.9	61,832	31,352
9	Florence	181,500	56.6	67,352	32,056
10	Richmond	178,100	38.4	45,457	34,883
11	Frankfort	157,300	48.0	53,905	28,460
12	Covington	153,600	51.4	53,770	40,923
13	Paducah	152,600	53.7	46,984	26,869
14	Owensboro	151,800	57.1	51,982	60,019
15	Henderson	144,200	53.4	46,276	28,166
16	Hopkinsville	130,500	46.4	43,577	31,042

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