Loading Content...
Average Home Values Double in Newark's Zip Code 07106 Amid Stable Homeownership
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Newark, New Jersey's zip code 07106 presents an intriguing case study of urban housing dynamics. This densely populated area has experienced significant fluctuations in homeownership rates, average home prices, and average rent prices over the past decade. The overall trend shows a slight increase in homeownership, rising average home prices, and relatively stable average rent prices.
The homeownership rate in zip code 07106 has shown a modest upward trend, increasing from 32% in 2015 to 35% in 2022. This change coincides with a substantial rise in average home prices, which grew from $156,273 in 2015 to $358,797 in 2022, representing a 129.6% increase. The relationship between homeownership rates and average home prices appears complex, as the rising prices did not deter an increase in homeownership. This could suggest that other factors, such as local economic improvements or changes in housing policies, may have influenced homeownership rates despite the price increases.
Federal interest rates have played a significant role in shaping homeownership trends. The period from 2015 to 2022 saw historically low interest rates, ranging from 0.13% to 1.68%. These low rates likely contributed to the increase in homeownership by making mortgages more affordable. The slight dip in homeownership from 34% in 2013 to 32% in 2015 coincided with a small increase in interest rates from 0.11% to 0.13%, demonstrating the sensitivity of homeownership to even minor rate changes.
Renter percentages in zip code 07106 have remained relatively high but showed a slight decrease from 68% in 2015 to 65% in 2022. Average rent prices during this period experienced moderate fluctuations, rising from $1,075 in 2015 to $1,093 in 2022, a modest 1.7% increase. The stability in rent prices, despite the significant increase in home values, may have contributed to the sustained high percentage of renters in the area. The population growth from 30,273 in 2015 to 35,348 in 2022 likely maintained demand for rental properties, helping to explain the persistent high renter percentage.
In 2023 and 2024, average home prices in zip code 07106 continued their upward trajectory, reaching $391,958 in 2023 and $416,965 in 2024. This represents a further 16.2% increase from 2022 to 2024. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, potentially impacting homeownership affordability and future trends in the housing market.
Looking ahead, predictive models suggest that average home prices in zip code 07106 may continue to rise over the next five years, potentially reaching around $500,000 by 2029 if current trends persist. Average rent prices are expected to show moderate increases, potentially reaching approximately $1,300 by 2029. However, these projections are subject to various economic factors and local market conditions.
In summary, zip code 07106 in Newark has demonstrated resilience in homeownership rates despite rapidly rising home prices. The area has maintained a high proportion of renters, with relatively stable average rent prices. The significant increase in home values, coupled with recent interest rate hikes, may reshape the housing landscape in the coming years, potentially affecting the balance between homeowners and renters in this urban New Jersey neighborhood.
