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Average Home Values and Ownership in Zip Code 55018: A Decade of Growth in Dennison, Minnesota
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 55018, located in Dennison, Minnesota, presents an interesting case study of housing trends in a small Midwestern community. Over the past decade, this area has experienced fluctuations in homeownership rates, average home prices, and average rent prices, reflecting broader economic shifts and local market dynamics.
The homeownership rate in zip code 55018 has remained relatively high, ranging from 89% to 95% between 2013 and 2022. This stability in homeownership coincides with a steady increase in average home prices. In 2018, the average home price was $307,557, which rose to $405,384 by 2022, representing a 31.8% increase over four years. This upward trend in home values may have contributed to the slight decrease in homeownership from 95% in 2017 to 89% in 2022, as higher prices potentially made homeownership less accessible for some residents.
Federal interest rates have played a role in shaping homeownership trends in the area. The period from 2013 to 2016 saw historically low interest rates, hovering around 0.1% to 0.4%. During this time, homeownership in zip code 55018 reached its peak at 94-95%. As interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, there was a slight decline in homeownership to 89%. This trend aligns with the general principle that lower interest rates tend to encourage homeownership by making mortgages more affordable.
The rental market in zip code 55018 has shown significant volatility in average rent prices. In 2013, the average rent was $762, which increased to $1,098 in 2014. After a period of fluctuation, including a notable drop to $156 in 2017, average rent prices rose sharply to $1,520 by 2022. This represents a 99.5% increase from 2013 to 2022. The percentage of renters has remained relatively low, fluctuating between 5% and 10% during this period. The population growth from 1,207 in 2013 to 1,256 in 2022 may have contributed to the upward pressure on rent prices, despite the small renter population.
In 2023 and 2024, the housing market in zip code 55018 continued its upward trajectory. The average home price reached $420,182 in 2023 and further increased to $437,444 in 2024, representing a 7.9% growth over two years. Concurrently, federal interest rates rose significantly, reaching 5.02% in 2023 and 5.33% in 2024, potentially impacting homebuying decisions in the area.
Looking ahead, predictive models suggest that the upward trend in both average home prices and rent prices is likely to continue over the next five years. Based on historical data and current market conditions, average home prices in zip code 55018 could potentially reach $500,000 by 2029. Similarly, average rent prices may continue to increase, potentially surpassing $1,800 per month within the same timeframe.
In summary, zip code 55018 has maintained a high rate of homeownership despite rising home prices. The area has experienced significant growth in both average home values and rent prices over the past decade. The interplay between federal interest rates, local population growth, and housing market dynamics has shaped these trends. As the community moves forward, it will likely continue to see rising property values and rental costs, potentially influencing the balance between homeowners and renters in this small Minnesota city.
