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Average Home Values and Ownership in Zip Code 35406: A Decade of Growth in Tuscaloosa, 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 35406, located in Tuscaloosa, Alabama, has experienced significant demographic and housing market changes over the past decade. This area has seen a steady increase in population, growing from 14,457 residents in 2010 to 19,759 in 2022, indicating its rising popularity. The ownership percentage has remained relatively stable, while average home prices and average rent prices have shown notable fluctuations.
The homeownership rate in zip code 35406 has experienced minor variations from 2013 to 2022. In 2013, the ownership rate stood at 76%, and it remained largely consistent, with only slight fluctuations, ending at 73% in 2022. During this same period, average home prices showed a steady upward trend. In 2010, the average home price was $285,243, and by 2022, it had risen to $426,373, representing a substantial increase of 49.5% over 12 years. This trend suggests that despite rising home prices, the area has maintained a relatively stable rate of homeownership.
Federal interest rates have played a role in homeownership trends in zip code 35406. From 2010 to 2021, interest rates remained historically low, ranging from 0.08% to 2.16%. This period of low interest rates coincided with the area's stable homeownership rates, as lower rates typically make mortgages more affordable and encourage home buying. However, the sharp increase in interest rates to 5.02% in 2023 and 5.33% in 2024 may pose challenges for potential homebuyers in the coming years.
Renter percentages in zip code 35406 have shown a slight increase over time, moving from 23% in 2013 to 27% in 2022. Interestingly, average rent prices have fluctuated during this period. In 2013, the average rent was $1,669, and it decreased to $1,361 in 2017 before rising again to $1,531 in 2022. This represents an overall decrease of 8.3% in average rent from 2013 to 2022, despite the growing population. The increase in renter percentage, coupled with the overall decrease in average rent, suggests that the area may be attracting more renters due to relatively affordable rental options.
Looking at the most recent data, average home prices in zip code 35406 continued to rise, reaching $443,065 in 2023 and $451,142 in 2024. This represents a 3.9% increase from 2022 to 2023 and a further 1.8% increase from 2023 to 2024. These increases occurred despite the high interest rates of 5.02% in 2023 and 5.33% in 2024, indicating strong demand for housing in the area.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 35406 will continue to rise, albeit at a potentially slower rate due to the higher interest rate environment. We project that by 2029, average home prices could reach approximately $525,000 to $550,000. For average rent prices, we expect a moderate increase over the next five years, potentially reaching $1,700 to $1,800 per month by 2029, assuming continued population growth and demand for rental properties.
In summary, zip code 35406 has demonstrated resilience in its housing market, maintaining stable homeownership rates despite significant increases in average home prices. The area has seen a slight shift towards renting, with average rent prices remaining relatively affordable. The recent sharp rise in interest rates may impact future homeownership trends, but strong home price growth in 2023 and 2024 suggests continued demand in the area. As the population continues to grow, both the ownership and rental markets in this zip code are likely to remain dynamic in the coming years.
