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 | $1,210 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,580 |
| 3 Bedrooms | $2,020 |
| 4 Bedrooms | $2,320 |
| 5 Bedrooms | $2,691 |
| 6 Bedrooms | $3,014 |
| 7 Bedrooms | $3,255 |
| 8 Bedrooms | $3,418 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,580 | $210,190 | 0.75% | D |
| 3BR | $2,020 | $286,222 | 0.71% | D |
| 4BR | $2,320 | $343,790 | 0.67% | D |
U.S. Census Bureau data (2024)
The market in ZIP 40228, located in Louisville, KY, exhibits a dynamic equilibrium between supply and demand, but leans slightly towards a scenario where demand is pressing on supply. This inference is drawn from the snapshot of key metrics that characterize the local rental and homeownership landscape.
The Fair Market Rent (FMR) for the area stands at $1,570 for fiscal year 2024, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,857. This discrepancy suggests that the actual market rents are higher than what the government deems fair for subsidized housing programs like Section 8, pointing to a market where landlords can charge above the FMR without significantly impacting occupancy rates.
A further indication of this balance is the low price-cut share of 0.3%, which means that very few listings are being reduced in price due to lack of interest. Additionally, the Days on Market (DOM) figure of 24 days reflects a relatively quick turnover rate for properties, suggesting that homes are finding buyers or renters promptly. The median home value in the area is $273,404, which, when considered alongside the rental prices, paints a picture of an accessible market for both renters and potential homeowners.
The 22.8% renter share is noteworthy. It implies a significant portion of the population opts for renting over homeownership, which could indicate long-term housing pressures such as affordability issues or a preference for flexibility among residents. In markets where a high percentage of the population are renters, there is often a sustained demand for rental properties, making it a viable investment option for landlords and small-portfolio investors.
In summary, the data points to a market where demand is robust enough to support current rental prices and a low rate of price cuts, yet there is a notable segment of the population that remains in the rental market, indicating ongoing housing challenges that keep the market in motion. For those interested in investing in this area, these dynamics suggest a stable environment with opportunities for both rental and sale investments.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.