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Carmi, Illinois: Home Values and Ownership Trends in a City of Fluctuating Interest Rates
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
Carmi, located in Illinois, is a small urban center with a population of 6,755 as of 2022. This charming city, covering an area of 2.59 square miles, has experienced interesting shifts in homeownership rates and housing prices over the past decade. The homeownership rate in Carmi has shown notable fluctuations between 2013 and 2022. Starting at 73% in 2013, it reached a peak of 79% in 2019 before settling at 72% in 2022. This trend coincides with changes in average home prices, which have generally increased over time. In 2016, the average home price was $77,120, rising to $80,604 by 2022, representing a 4.5% increase over six years.
The relationship between federal interest rates and homeownership rates in Carmi follows a typical pattern. As interest rates remained low from 2013 to 2015 (around 0.1%), homeownership rates stayed relatively stable. However, as interest rates began to rise from 2016 onwards, reaching 1.68% in 2022, there was a slight decline in homeownership rates from their peak in 2019. This trend aligns with the general understanding that lower interest rates tend to encourage homeownership due to more affordable financing options.
Renter percentages in Carmi have inversely mirrored homeownership rates, ranging from 21% to 31% between 2013 and 2022. Average rent prices have shown volatility during this period. Starting at $629 in 2013, rent prices peaked at $721 in 2014, then fluctuated before reaching $723 in 2022. This represents a 14.9% increase in average rent over the decade. The renter population has remained relatively stable despite these price changes, suggesting a consistent demand for rental properties in the city.
In 2023 and 2024, Carmi experienced a notable shift in the housing market. The average home price decreased from $80,604 in 2022 to $75,427 in 2023, and further to $72,631 in 2024, marking a 9.9% decline over two years. This downturn coincides with a significant increase in federal interest rates, which rose to 5.02% in 2023 and 5.33% in 2024, potentially impacting home affordability and buyer demand.
Looking ahead, based on recent trends and current economic conditions, it's projected that average home prices in Carmi may continue to face downward pressure in the short term due to high interest rates. However, as the market adjusts, prices could stabilize and potentially see modest growth in the next 3-5 years. Rent prices, which have shown resilience even during periods of economic fluctuation, are expected to maintain a steady upward trajectory, potentially reaching an average of $850-$900 per month within the next five years.
In summary, Carmi's housing market has demonstrated both resilience and sensitivity to broader economic factors. The recent decline in home prices, coupled with rising interest rates, marks a significant shift from the previous decade's trends. Meanwhile, the rental market has shown steady growth, reflecting ongoing demand for rental properties in the city. These dynamics suggest a housing market in transition, with potential opportunities for both buyers and renters in the coming years.
