Louisville & Lexington Multifamily Market Report
Multifamily Overview
In 2024, multifamily sales transactions increased 155% year-over-year in Lexington and Louisville, driven by high-quality, well-leased, and value-added properties. Transaction volume reached $479M, a 232% increase YOY. Notable transactions include the $47.3 million sale of Reserve at Hamburg, the $44 million acquisition of a five-property portfolio in Louisville. Together, the average sale price was $24M recording an average price per unit of $108,538.
Rent growth, specifically in Lexington, outpaced national trends at 4.5% in 2024. The supply surge in Louisville pushed vacancy in the market upward to 8.5% and slowed rent growth to 2.1%, though still above the national benchmark of 0.9%.
Lexington’s controlled construction pipeline—currently at its lowest level in six years due to high financing and labor costs—supports balanced market conditions. Only 250 units are currently under construction in the Lexington MSA, with a 413-unit property delivered already in 2025. The constrained new starts will limit deliveries in the coming years, supporting stable rent growth. Conversely, Louisville’s multifamily market experienced record-high deliveries in 2024, adding 4,100 units including 1,300 units concentrated in Southern Indiana. Inventory has increased in this area by 43% since 202. However, rising interest rates and material costs are cooling the pipeline, with just 2,700 units underway—a significant slowdown compared to recent years.
Louisville’s high-end units, particularly in Downtown and Southern Indiana, are grappling with elevated vacancy, though the region’s diverse economic base, including logistics and advanced manufacturing, underpins long-term demand. As both cities face unique challenges. Lexington’s measured growth and affordability position it for steady rent gains, while Louisville’s evolving landscape highlights opportunities for targeted investment as market conditions stabilize.
Construction
The bulk of Lexington’s multifamily housing development remains muted, with 670 units delivered over the past year, matching the 10-year average, and just one major project, Gateway Lofts Lexington (257 units), completed in 24Q2. Development activity is moderating, with 250 units underway, representing 0.6% of inventory compared to the national benchmark of 3.3%. Notable projects include The Avery by Ball Homes (413 units, delivery in 2025) and The Landing at Lakewood Harbour by Andover Management Group (101 units, delivery in late 2024). Elevated financing and labor costs have stalled new construction starts, leading to muted future deliveries.
In contrast, Louisville’s multifamily development surged to a record high in 2024, with 4,100 units delivered, including 1,500 in Q3 alone. Deliveries were concentrated in the Southern Indiana submarket, where 1,300 units (~33% of market-wide deliveries) were added, driven by projects such as The Flats of River Ridge (364 units, August 2024). South Jefferson County accounted for 1,200 units (~30% of deliveries), while 2,700 units are underway across the market, representing 2.8% of inventory, compared to the national benchmark of 3.3%. Southern Indiana, fueled by economic growth from River Ridge Commerce Center ($2.93 billion impact in 2023), has 800 units under construction (5.3% of submarket inventory).
Development in Louisville remains robust in areas like Downtown, where Beecher Terrace Phase IV (210 units) is set to deliver in 2025. However, high interest rates and material costs have significantly reduced construction starts, indicating a slower pace of deliveries in both markets in the coming years.
