The Louisville Mortgage Growth Forecast

The next five years see slow market growth in Derby City

Later this month, The Mortgage Collaborative is heading to Louisville for its semi-annual conference — so, naturally, we’re champing at the bit to share our analysis of the surrounding Core Based Statistical Area (learn the difference between CBSAs and other geographical units over here).

Nestled on the banks of the Ohio River, Louisville is known for horse racing, the Louisville Slugger, and its diverse heritage and culture. And while the purse for this year’s 150th Kentucky Derby has ballooned to a record-setting $5 million, data from Mortgage MarketSmart, our mortgage market intelligence and forecasting platform, reveals a much slower pace of mortgage market growth in “Derby City” over the next five years.

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Louisville’s Batting $3.49 Billion

While examining national mortgage forecasts offers valuable insights, it's crucial to recognize the high degree of variability within the U.S. mortgage landscape. The United States comprises 84,414 census tracts, 927 CBSAs, and 387 Metropolitan Statistical Areas (MSAs), each with its distinct characteristics. Our approach involves forecasting mortgage opportunities at the census tract level, enabling lenders to make informed decisions in local markets.

The Louisville/Jefferson County, KY-IN CBSA (heretofore referred to as the Louisville market) includes 515,310 households and has a homeownership rate of 67.92%. By breaking down the demographics, we predict 13,467 loans are incoming this year, amounting to $3.49 billion in purchase dollars. Here’s a visual of the census tract-level forecast for 2024 purchase dollars:

Slow and Steady Growth

Rather than barreling out of the gates like a Derby winner, the Louisville market is expected to take a leisurely amble for the next five years. Though the market is predicted to grow in that time, it will be a slow, gradual increase.

iEmergent’s proprietary Mortgage Velocity Index (MVI) compares a market’s mortgage growth over the next five years to the growth of the overall U.S. Market. An MVI of 1 means a market is on pace with national mortgage growth. Louisville’s MVI is sitting at 0.01, indicating a much slower rate of growth than the overall U.S. market. Take a look at how it measures up to other U.S. cities:

Lend Strategically to Build Value

To win in a market with slow growth, lenders in Louisville must adopt precise, data-informed strategies to engage with potential homebuyers prepared for a mortgage. Leveraging data to identify real estate partners that align with their objectives is a critical step in this process.

For example, if your aim is to collaborate with real estate agents known for successfully working with low- to moderate-income (LMI) borrowers, you can use Mortgage MarketSmart to pinpoint the LMI listing agents with the highest volume of listings or financial value within your market.

Want to see the names and contact information above? Request a MortgageMarketSmart demo.

If you prefer to focus on building long-term partnerships within the community, we can help you get started by identifying Centers of Influence (CoI) in the community, such as public libraries, churches, and nonprofits. Lenders can pass this actionable information to MLOs so they can build relationships with these potential partners.

Pinpoint High-Growth Neighborhoods

While the Louisville market has an MVI of 0.01, individual census tracts grow at their own pace. By drilling down to show the MVI of each census tract, lenders can pinpoint opportunities even in slow-growth markets like Louisville. This map details each census tract in the Louisville CBSA, with darker tracts growing faster.

Louisville’s Diverse Communities

Reaching underserved markets—often untapped markets—provides a practical approach to strategic, equitable growth in mortgage lending. In Louisville, the homeownership gap is stark for Black and Hispanic households. Overall, the minority homeownership rate is more than 25 percentage points lower than overall, sitting at just 42.5%.

Homeownership Rates

All maps and data in this blog are from iEmergent’s proprietary forecasts and Mortgage MarketSmart’s suite of market intelligence tools.

Generally accepted minimum accuracy standards for predictive analytics: 70%.