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Average Home Values and Ownership in Zip Code 35221: A Decade of Housing Market Dynamics in Birmingham, Alabama
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Zip code 35221, located in Birmingham, Alabama, has experienced significant demographic and housing market changes over the past decade. This area has seen fluctuations in homeownership rates and notable shifts in average home and rent prices, reflecting broader economic trends and local market conditions.
The homeownership rate in zip code 35221 has shown a gradual decline from 2013 to 2022. In 2013, the area had a 68% homeownership rate, which decreased to 61% by 2022. This 7 percentage point drop coincides with interesting trends in average home prices. Despite the declining ownership rate, average home prices in the area have seen substantial growth. In 2013, the average home price was $21,726, which more than doubled to $53,546 by 2022, representing a 146% increase over this period.
The relationship between federal interest rates and homeownership rates in this zip code shows some correlation. As interest rates remained low from 2013 to 2016 (below 0.5%), the homeownership rate remained relatively stable, only declining from 68% to 65%. However, as interest rates began to rise more significantly from 2017 onwards, reaching 1.68% in 2022, the homeownership rate continued its downward trend, falling to 61%. This suggests that rising interest rates may have contributed to the declining homeownership in the area, possibly making mortgages less affordable for potential buyers.
Renter percentages in zip code 35221 have inversely mirrored the homeownership trend, increasing from 31% in 2013 to 39% in 2022. Interestingly, average rent prices have not shown a consistent upward trend despite the increasing renter population. Average rent prices rose from $830 in 2013 to a peak of $975 in 2017 but then declined to $856 in 2022. This fluctuation in rent prices, despite the increasing renter population, could be attributed to various factors such as changes in housing supply or local economic conditions.
Looking at the most recent data, the average home price in zip code 35221 for 2023 was $52,794, showing a slight decrease from 2022. However, in 2024, the average home price increased to $54,291, indicating a recovery and continued growth in the housing market. These price movements coincide with federal interest rates of 5.02% in 2023 and 5.33% in 2024, which are significantly higher than previous years. Despite these high interest rates, the housing market in this zip code appears to remain resilient.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 35221 will continue to rise, albeit at a more moderate pace. The sharp increases seen in recent years may level off, with annual growth rates potentially settling around 3-5%. For rent prices, we expect a stabilization and potential gradual increase, possibly reaching an average of $900-$950 per month within the next five years.
In summary, zip code 35221 has witnessed a shift towards renting, with homeownership rates declining despite rising average home values. The area has shown resilience in its housing market, with home prices more than doubling over the past decade. While rent prices have fluctuated, they have not kept pace with the growth in home values. The coming years are likely to see continued, though more moderate, growth in both home prices and rents, shaped by broader economic factors and local market dynamics.
