LOUISVILLE, Ky. - With mortgage rates dropping and home construction rising, the housing market is gaining momentum across the country. Right now, if you are looking to buy a home in Kentucky, things are looking up because there are more houses to pick from and those homes are more affordable compared to this spring.

All of this comes after a record-low home inventory in May drove up home prices in Kentucky. The prices have not changed much since May, despite rising inventory. However, mortgage rates are dropping. According to Freddie Mac, mortgage rates dropped to 3.66 percent this week, which is down from 3.75 percent last week. A year ago, mortgage rates were at 4.81 percent. Phillips said, that low interest rate is balancing out the price in many cases and sometimes making the homes cheaper than they were before. 

"The amount of income needed for a first-time home buyer to qualify has also dropped. We are talking nation-wide from roughly $52,000 to $49,000 for a roughly $1,000 mortgage payment," Phillips said.

With increased housing inventory, experts predict that prices will start to fall. In May, the housing inventory in Kentucky was at 3.1. That means it would take a little over three months for the home to enter and leave the market. Looking at the latest available numbers from September, it is now at 3.89. That is a 25 percent increase. Kentucky Realtors President Rip Phillips said the goal housing inventory would be six months. That means, while the inventory is increasing, Kentucky could still use a lot more homes for sale in order to balance out the market.

When talking to Phillips in July, he said a contributing factor to the low inventory was not having enough new construction. The U.S. Census Bureau released a new report showing that there was a 3.2 percent increase in single family home permits. If Kentucky mirrors that national trend, that could mean more new construction in 2020.

"I don't think we are letting up the gas. We are not pushing our foot on it, but we are cruising right along. Things look very positive for next year," Phillips said.

If mortgage rates continue to drop and inventory continues to rise, the new year could be good for both home buyers and sellers.