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Average Home Values and Ownership in Zip Code 78731: A Decade of Change Near University of Texas at Austin
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 78731, located in Austin, Texas, has undergone significant changes in its housing market over the past decade. This area has experienced fluctuations in homeownership rates, alongside substantial increases in both average home prices and average rent prices. The interplay between these factors has shaped the local real estate landscape and influenced residents' housing choices.
The homeownership rate in zip code 78731 has remained relatively stable, with slight fluctuations over the years. In 2013, the homeownership rate was 57%, and it peaked at 58% from 2014 to 2016. However, there has been a gradual decline in recent years, with the rate dropping to 55% in 2022. This trend coincides with a dramatic increase in average home prices. In 2013, the average home price was $507,682, and it has more than doubled to $1,192,144 by 2022, representing a 135% increase over nine years.
Federal interest rates have played a significant role in homeownership trends. From 2013 to 2016, when interest rates were exceptionally low (ranging from 0.11% to 0.40%), homeownership rates in the zip code remained at their highest levels of 57-58%. As interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, homeownership rates showed a slight decline, dropping to 55% by 2022. This trend aligns with the general principle that lower interest rates tend to encourage homeownership due to more affordable financing options.
Renter percentages in zip code 78731 have shown a gradual increase over the years, rising from 41% in 2013 to 45% in 2022. This trend has been accompanied by a significant increase in average rent prices. In 2013, the average rent was $1,470, which rose to $1,895 by 2022, representing a 29% increase over nine years. The population in the zip code has also grown during this period, from 26,445 in 2013 to 27,122 in 2022, potentially contributing to the increased demand for rental properties and the subsequent rise in rent prices.
In 2023 and 2024, we observe a slight decrease in average home prices in zip code 78731. The average home price in 2023 was $1,118,967, dropping further to $1,075,871 in 2024. This represents a 6.2% decrease from 2023 to 2024. Interestingly, this decline in home prices coincides with a significant increase in federal interest rates, which rose from 5.02% in 2023 to 5.33% in 2024. These higher interest rates likely contribute to the cooling of the housing market in this area.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 78731 may continue to experience moderate fluctuations. If the current trend persists, we might see average home prices stabilize or potentially decrease slightly over the next five years. However, given the area's desirability and historical growth, a dramatic decline is unlikely. For average rent prices, the forecast suggests a continued upward trend, albeit at a potentially slower rate than observed in recent years. We estimate that average rent prices could increase by 10-15% over the next five years, reaching approximately $2,100-$2,200 per month by 2029.
In conclusion, zip code 78731 has experienced significant growth in both average home prices and average rent prices over the past decade. While homeownership rates have remained relatively stable with a slight recent decline, renter percentages have gradually increased. The interplay between federal interest rates, population growth, and housing demand has shaped these trends. Moving forward, we anticipate a potential stabilization in home prices and continued moderate growth in rent prices. These trends reflect the dynamic nature of the Austin real estate market and the ongoing desirability of this particular zip code.
