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Buffalo, Missouri: Rising Home Values Amid Declining Ownership
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, Missouri, a small urban area in Dallas County, has experienced significant changes in its housing market over the past decade. With a population of 5,485 in 2022 and a land area of 2.88 square miles, the city maintains a relatively dense population of 1,906 people per square mile. The housing market in Buffalo has undergone notable shifts, reflecting broader economic trends and local market dynamics.
From 2013 to 2022, Buffalo witnessed a substantial decline in homeownership rates, dropping from 73% to 56%. This 17 percentage point decrease coincided with a significant rise in average home prices. In 2013, the average home price was $83,415, but by 2022, it had more than doubled to $187,692, representing a 125% increase over this period. This inverse relationship between homeownership rates and home prices suggests that rising property values may have made homeownership less attainable for some residents.
The fluctuations in federal interest rates appear to have influenced homeownership trends in Buffalo. In 2013, when homeownership was at 73%, the federal interest rate was a low 0.11%. As interest rates began to rise, reaching 1.83% by 2018, homeownership declined to 56%. This trend aligns with the general principle that lower interest rates tend to encourage homeownership by making mortgages more affordable, while higher rates can deter potential buyers.
As homeownership decreased, the percentage of renters in Buffalo increased from 27% in 2013 to 44% in 2022. This shift was accompanied by a rise in average rent prices, which grew from $553 in 2013 to $740 in 2022, a 33.8% increase. The growing renter population and rising rent prices suggest an increasing demand for rental properties, possibly driven by those priced out of the homeownership market.
In 2023, the average home price in Buffalo reached $189,557, a slight increase from the previous year. As of 2024, the average home price has further risen to $197,482, indicating continued growth in the housing market. Simultaneously, federal interest rates have increased significantly, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates may impact future homeownership trends and housing affordability in the city.
Looking ahead, predictive models suggest that average home prices in Buffalo may continue to rise over the next five years, potentially reaching around $230,000 by 2029. Average rent prices are also expected to increase, possibly approaching $850 per month in the same timeframe. These projections are based on historical trends and current market conditions.
In summary, Buffalo has experienced a notable shift from homeownership to renting over the past decade, driven by rapidly increasing home prices and fluctuating interest rates. The inverse relationship between homeownership rates and home prices, coupled with the rise in both the renter population and rent prices, indicates a changing housing landscape in the city. As home prices and interest rates continue to rise, these trends may persist, potentially reshaping the city's housing market and demographic composition in the coming years.
