Rent vs buy in Kentucky
With today's numbers over 7 years, renting comes out ahead in 3 of the state's 4 cities of 50,000+, while 1 is a toss-up.
Kentucky cities: rent or buy
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Louisville | Rent | renting wins by $20k | year 13 | $261,376 | $1,330 |
| Bowling Green | Rent | renting wins by $36k | year 22 | $280,339 | $1,240 |
Sources: Zillow Home Value and Observed Rent indexes. Our rent vs buy method for 20% down over 7 years produces the verdicts.
What Kentucky shows
Even in places where home prices have climbed, Kentucky keeps rent low for you. Among the state's 4 cities of 50,000+, renting wins in 3 over 7 years, while 1 is a close call. A typical home in Louisville costs $261,376, while rent goes for $1,330 a month. You reach break even only at year 13, while renting wins by $20k over 7 years. Monthly rent in Lexington is $1,631, set against a home price of $331,087. There, renting wins by $29k and moves your break even point out to year 14.
In Bowling Green, the gap grows wider for you. Monthly rent of $1,240 goes against a typical home price of $280,339. Over 7 years, renting wins by $36k, and you reach break even no sooner than year 22. Over 7 years, Owensboro is the only city where the race is tight. A typical home costs $213,413, and monthly rent comes to $1,259. Your 2 options sit $3k apart, and you can break even by year 8.
The statewide numbers explain why there's less pressure on you to buy. A typical home runs $231k, and 32% of households rent, versus 35% across the country. Across 574,561 renter households, the median monthly rent is $967, well under the $1,413 US figure. Buying means a 0.75% property tax rate for you, not the 0.94% US rate. Homeowners insurance costs you $1,283 a year, a bit under the $1,308 US cost. Long term, home prices grew 3.9% a year, and 6.6% a year in the past 10 years. If you stay in your home long enough, its value builds steadily.
We think you should rent in Kentucky, unless you're in Owensboro or you stay past year 13. Because rents are lower than buying costs in most big cities, you can rent and save the difference.