The third quarter of 2025 delivered another solid performance for Louisville’s residential market, continuing a steady upward trend seen throughout the past year. Improving consumer confidence, lower volatility in mortgage rates, and expanding inventory have all contributed to an increasingly active housing market. While inflation remains a concern in some national sectors, its impact on housing appears to be moderating locally. At the same time, rising equity markets have helped foster cautious optimism—particularly among discretionary buyers—despite the broader backdrop of political uncertainty and shifting global trade dynamics. Looking across the past four quarters, a few clear trends have emerged: active listings have steadily increased, particularly in the high-end and $1M+ segments, while prices have appreciated at a more sustainable pace than during the peak of the post-COVID market cycle. Taken together, these factors point toward a market that is regaining balance while maintaining healthy momentum.
The Overall Louisville Market
The overall Louisville market posted its strongest quarterly sales performance of the year, with the number of homes sold rising 6.5% year-over-year. Home values continued their steady ascent, with the median price per square foot increasing by 2.6%. Perhaps most notably, active listings jumped by 19.2%, marking the fourth consecutive quarter of inventory growth. This added supply is helping to normalize conditions and reduce the frenzied pace seen in prior years. Homes are still selling at a solid clip, though the average days on market climbed by 14.3%, indicating that buyers are taking slightly longer to make decisions. With 2.8 months of inventory at quarter’s end, the overall market remains tight—but continues trending towards a more balanced market.
High-End Louisville Market (Homes $500,000+)
The high-end market continued to outperform, recording a 15.2% increase in the number of homes sold. Strong buyer demand and increased seller participation helped push active listings up by 21.7%, giving luxury buyers a broader selection than they’ve seen in recent quarters. Despite this surge in inventory, pricing remained resilient, with the median price per square foot climbing 2.8%. Average days on market held essentially flat, rising just 2.2% compared to the previous year—an indication that well-priced, well-presented homes continue to move efficiently. The quarter closed with 4.2 months of inventory in this segment, bringing conditions closer to a balanced market while still providing some leverage for sellers.
$1M+ Market
Louisville’s $1M+ market was a standout performer in Q3, with the number of sales climbing by a remarkable 36.5% year-over-year. This surge in activity was accompanied by a 6.2% increase in the median price per square foot, signaling continued appetite for luxury offerings—even amid economic uncertainty. Inventory levels remained high in this segment, ending the quarter with 7.3 months of supply, but is still well below the historical average. While that figure suggests a more buyer-friendly environment, it also reflects increased confidence among high-end sellers who are re-entering the market in greater numbers.
As we head into the final stretch of 2025, Louisville’s housing market appears to be in a strong and stable position. Inventory has expanded, pricing growth remains healthy but manageable, and demand continues to show resilience across nearly all segments. Looking ahead, broader economic and political developments may shape the market’s trajectory, but the fundamentals locally remain sound. Whether you’re considering a move, planning to sell, or just keeping an eye on the market, now is a great time to assess your strategy and take advantage of shifting conditions. Curious how these trends impact your plans? Reach out for expert insight tailored to your unique real estate goals.
Click to download the 2025 Q3 Louisville Market Report.