Location: Louisville, KY | Metro: Louisville, KY-IN HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,090 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,430 |
| 3 Bedrooms | $1,830 |
| 4 Bedrooms | $2,100 |
| 5 Bedrooms | $2,436 |
| 6 Bedrooms | $2,728 |
| 7 Bedrooms | $2,946 |
| 8 Bedrooms | $3,093 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,190 | $199,293 | 0.6% | F |
| 2BR | $1,430 | $271,320 | 0.53% | F |
| 3BR | $1,830 | $340,689 | 0.54% | F |
| 4BR | $2,100 | $579,310 | 0.36% | F |
| 5BR | $2,436 | $807,710 | 0.3% | F |
U.S. Census Bureau data (2024)
The dynamics of ZIP 40204 in Louisville, KY, reveal a market in motion, characterized by a delicate balance between supply and demand. The Fair Market Rent (FMR) for the area stands at $1,440 for fiscal year 2024, while the actual market rent, as measured by Zillow's Observed Rent Index (ZORI), is slightly lower at $1,373. This suggests that landlords are adjusting their rents to align closely with the FMR, indicating a competitive yet stable rental environment.
A price-cut share of just 0.3% implies that very few listings are being discounted, which could mean that the majority of properties are finding buyers without needing to reduce their asking prices. This low rate of price cuts signals strong buyer interest and a market where demand is robust enough to support current pricing levels.
The median home value in ZIP 40204 is $281,269. While the days on market (DOM) information is not available, the combination of a relatively high FMR and a slightly lower market rent indicates a scenario where demand is sufficient to keep rents near the FMR level, but not so high as to cause significant price increases.
A 50.6% renter share highlights a significant portion of the population that relies on renting rather than owning homes. This high percentage of renters can exert long-term housing pressure on the market, as it suggests a steady demand for rental properties. Landlords and small-portfolio investors should expect ongoing interest in rental units, which can provide a consistent stream of income.
The snapshot of the market shows that the rental segment is active, with a strong presence of renters and a competitive rental landscape. For those considering investment in this area, the current conditions suggest a market where demand meets supply effectively, creating an environment conducive to both property ownership and rental management.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.