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Average Home Values and Ownership in Zip Code 56686: A Decade of Resilient Homeownership in Williams, 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 56686, located in Williams, Minnesota, presents an interesting case study of homeownership and housing market trends. This rural area, spanning 385.25 square miles, has experienced fluctuations in its population and housing dynamics over the past decade. The overall trend shows a high rate of homeownership, with significant changes in average home prices and rent costs.
The homeownership rate in zip code 56686 has remained consistently high, ranging from 91% to 98% between 2013 and 2022. This strong preference for homeownership is particularly notable given the area's relatively small population. Average home prices have shown a steady upward trend, increasing from $128,692 in 2013 to $208,164 in 2022, representing a substantial 61.8% growth over nine years.
The relationship between federal interest rates and homeownership rates in this area is less straightforward than typically observed nationally. Despite fluctuations in interest rates, the homeownership rate remained relatively stable and high. For instance, when interest rates dropped to near-zero levels in 2020 and 2021 (0.38% and 0.08% respectively), homeownership reached its peak at 98%. However, even as rates began to rise in 2022 to 1.68%, the homeownership rate only slightly decreased to 89%, still maintaining a high level.
Renter percentages in zip code 56686 have been consistently low, ranging from 2% to 10% between 2013 and 2022. The average rent prices, however, have shown considerable volatility. Starting at $568 in 2013, rent prices peaked at $785 in 2019, before declining to $693 in 2022. This represents a 22% increase over the decade, despite the recent downward trend. The low renter population suggests that changes in rent prices may have a limited impact on the overall housing market in this area.
Looking at the most recent data, the average home price in zip code 56686 reached $219,490 in 2023, marking the highest point in the observed period. However, in 2024, there was a notable decrease to $200,247, representing an 8.8% drop. This decline coincides with a significant increase in federal interest rates, which rose to 5.02% in 2023 and further to 5.33% in 2024. These higher interest rates likely contributed to the cooling of home prices in the area.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 56686 may experience moderate growth, potentially reaching around $230,000 by 2029. This projection assumes a stabilization of interest rates and continued demand for homeownership in the area. For rent prices, the forecast suggests a potential increase to approximately $750-$800 per month over the next five years, assuming the area maintains its current economic trajectory and housing demand patterns.
In summary, zip code 56686 demonstrates a robust preference for homeownership, with average home prices showing significant growth over the past decade despite recent fluctuations. The rental market, while smaller, has also seen overall increases in prices. The area's housing market has shown resilience in the face of changing interest rates, suggesting that local factors play a significant role in driving housing trends in this rural Minnesota community.
