The second quarter of 2025 brought a wave of renewed activity to the Louisville real estate market. Easing inflation and increased consumer confidence helped fuel housing demand, while a modest bump in listing inventory offered buyers more breathing room than they’ve had in recent years. Though mortgage rates remain elevated relative to the ultra-low levels of the past decade, they’ve largely stabilized—giving buyers a clearer outlook and encouraging sellers who had been sitting on the sidelines to re-engage. Still, questions around the broader economic outlook persist, with volatility in equity markets and ongoing uncertainty surrounding international trade policy keeping some would-be movers in wait-and-see mode.
The Overall Louisville Market
Louisville’s overall residential market posted a solid performance in Q2, with the number of homes sold increasing by 3.0% year-over-year. Home values continued to appreciate steadily, as the median price per square foot rose 2.7%. Importantly, the number of active listings jumped by 16.0%, a welcome development for buyers who have been constrained by tight supply in recent years. Homes spent slightly more time on the market compared to last year, with average days on market increasing by 12.8%. Even with the boost in inventory, available supply remained relatively limited at 2.4 months, continuing to favor sellers in most price segments.
High-End Louisville Market (Homes $500,000+)
The high-end market (typically homes priced at $500,000 and above) saw a healthy jump in activity, with a 9.1% increase in the number of homes sold. Strong demand for move-in-ready and well-located properties helped drive a 5.4% increase in the median price per square foot. Sellers responded to the momentum, with active listings up 16.8% compared to the same period last year. The average days on market ticked up modestly by 3.6%, suggesting that while buyers are still active, they’re proceeding with slightly more caution. The quarter closed with 4.2 months of inventory, signaling a more balanced environment than in recent years but still leaning slightly toward sellers in many submarkets.
$1M+ Market
Louisville’s $1M+ market posted a 3.1% increase in the number of homes sold, extending its strong run in recent quarters. The median price per square foot rose by 5.5%, supported by limited new construction and sustained interest from both local and out-of-town buyers. With 7.8 months of inventory available, this segment continues to offer more choice and negotiation leverage for buyers—making it one of the few price tiers approaching buyer-favorable conditions.
As we move into the second half of the year, the Louisville housing market remains active, if not without complexity. Interest rates appear to be holding steady, and a growing number of listings is helping to normalize conditions, particularly at the higher end of the market. Still, questions about economic policy and financial market volatility could influence buyer behavior in the coming months. As always, real estate is hyper-local—and understanding your specific market segment remains essential. Thinking of making a move? Reach out to see how these trends could impact your next purchase or sale.
Click to download the 2025 Q2 Louisville Market Report.