LEXINGTON, Ky. (LEX 18) — Interest rates have risen, as have home prices, but there’s one corner of the real estate market that first-time buyers should pay attention to. While it’s a tough time for sellers, some agents say it could be a good time to buy.
Hannah and Nick Garnett moved into their first new home in June. Hannah showed her real estate agent, Christina Dudek, how far they had progressed with the renovation.
Hannah tells Christina, “It’s really cool that you all see the potential of what it’s become, because we didn’t even have that vision when we walked into this room.”
Hannah and Nick have made the house their own. Christina is an associate broker at Coldwell Banker McMahan. She explains that now is the right time to think about buying, while higher interest rates have eased slightly. She says, “It’s gotten a little more difficult for sellers because of interest rates – they’re not selling as quickly, there aren’t as many multiple offers. So some of these buyers have an opportunity to get their foot in the door.”
Data from Bluegrass Realtors shows that home prices have been rising in recent years. At the end of 2023, the median home price in Fayette County was $315,000. At the end of July 2024, it rose to $335,000. About a decade ago, it was only $159,000.
Christina explains that buying can become easier as rents rise. She says, “We’re a one-college town, so rents are just crazy. If four or five people rent a house, they can split the cost and those higher rents just keep going up, which actually makes it harder for families and couples to rent because they’re now competing with college students and the like.”
Before their big move, Hannah and Nick were renters. Prices in Lexington are rising. Zillow estimates the average rent is $1,650, up $150 from the same period last year.
Hannah says they have flexibility with current interest rates. “Yes, we knew that as first-time buyers we wouldn’t be able to compete if we got into a competition for contracts… We were at a point where we could even negotiate some of the closing costs into our contract, which isn’t possible when interest rates are low because you just have to move into the house,” Hannah says.
Hannah says they wanted to build something of their own. “The investment is so worthwhile because we could even choose to keep the property and use it as a rental property later or sell it, but all the money we pay month after month is building up equity that will help us in the future.”
