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Buffalo, Iowa: High Homeownership Rates and Rising Home Values Along the Mississippi
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
Buffalo, Iowa, a small but growing community in Scott County, is situated along the picturesque Mississippi River. This city has experienced significant changes in its housing market over the past decade. The homeownership rate has remained consistently high, while average home prices have shown a steady upward trend. Average rent prices have fluctuated but generally increased over time.
The homeownership rate in Buffalo has remained remarkably stable, hovering around 90% throughout the observed period. In 2013, the homeownership rate was 93%, and it peaked at 96% in 2015. Since then, there has been a slight decline, reaching 90% in 2022. Despite this minor decrease, the city maintains a significantly higher homeownership rate compared to the national average. Concurrently, average home prices have shown a consistent upward trend. In 2010, the average home price was $111,610, which increased to $150,925 by 2022, representing a 35% increase over 12 years.
The relationship between federal interest rates and homeownership rates in Buffalo appears to follow the well-established trend of lower interest rates encouraging homeownership. For instance, when interest rates were at historic lows between 2010 and 2016 (ranging from 0.1% to 0.4%), the homeownership rate in Buffalo remained above 93%. As interest rates began to rise from 2017 onwards, there was a slight decline in homeownership, though it remained high at 90% in 2022.
The renter population in Buffalo has seen a gradual increase over the years, from 7% in 2013 to 10% in 2022. This growth in the renter population coincides with an overall increase in average rent prices. In 2013, the average rent was $472, which rose to $689 by 2022, representing a 46% increase. It's worth noting that there were some fluctuations in rent prices during this period, with a notable dip to $200 in 2015 before rebounding.
In 2023, the average home price in Buffalo reached $152,634, and it further increased to $158,593 in 2024. This continued upward trend in home prices is occurring despite the federal interest rate rising to 5.02% in 2023 and 5.33% in 2024, which are the highest rates seen since 2007.
Looking ahead, based on the observed trends, it's projected that average home prices in Buffalo will continue to rise over the next five years, potentially reaching around $180,000 by 2029. Average rent prices are also expected to increase, possibly surpassing $800 per month within the same timeframe. However, the rate of increase may slow down if interest rates remain high, potentially affecting both home purchases and rental demand.
In summary, Buffalo's housing market is characterized by a consistently high homeownership rate, steadily increasing average home prices, and a gradual rise in both the renter population and average rent prices. The city's ability to maintain such high homeownership rates, even in the face of rising home prices and interest rates, suggests a strong local economy and a continued preference for homeownership among its residents.
