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Average Home Values and Ownership in Zip Code 56373: A Decade of Changes in Royalton, 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 56373, located in Royalton, Minnesota, has experienced notable shifts in homeownership, average home prices, and average rent prices over the past decade. This area, spanning 101.9 square miles, has seen a gradual increase in population, reaching 3,751 residents in 2022.
The ownership percentage in this zip code has shown a slight downward trend, decreasing from 86% in 2013 to 81% in 2022. Despite this decline, the average home prices have consistently risen. In 2013, the average home price was $159,794, which steadily increased to $324,466 by 2022, representing a substantial 103% growth over nine years. This inverse relationship between homeownership rates and average home prices suggests that rising property values may be making homeownership less accessible for some residents.
Federal interest rates have played a significant role in homeownership trends. From 2013 to 2016, interest rates remained below 0.5%, coinciding with a period of relative stability in homeownership rates (84-86%). As interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, we observed a gradual decline in homeownership percentages. This trend aligns with the general principle that lower interest rates tend to encourage homeownership due to more affordable financing options.
The renter population in zip code 56373 has grown from 14% in 2013 to 19% in 2022. Interestingly, the average rent prices have shown fluctuations during this period. In 2013, the average rent was $779, peaking at $896 in 2014 before declining to $562 in 2018. By 2022, the average rent had rebounded to $829. These fluctuations in rent prices, coupled with the increasing renter population, suggest a complex rental market influenced by various factors, including local economic conditions and housing supply.
In 2023 and 2024, the average home prices in zip code 56373 continued their upward trajectory, reaching $336,466 in 2023 and $347,776 in 2024. This represents a 3.7% increase from 2022 to 2023 and a further 3.4% increase from 2023 to 2024. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, potentially impacting homebuying decisions in the area.
Looking ahead, predictive models suggest that average home prices in zip code 56373 may continue to rise over the next five years, potentially reaching around $400,000 by 2029 if current trends persist. Average rent prices are also expected to increase, possibly surpassing $900 per month within the same timeframe. However, these projections are subject to various economic factors and local market conditions.
In summary, zip code 56373 has experienced a gradual shift towards a higher percentage of renters, coupled with consistently rising average home prices. The interplay between federal interest rates, homeownership rates, and property values highlights the complex dynamics of the local real estate market. As the area continues to grow, balancing housing affordability with property value appreciation will likely be a key challenge for the community.
