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Decatur's Rising Home Values and Ownership: A Decade of Growth in the Soybean Capital
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
Decatur, Illinois, a city known for its rich agricultural heritage and as the original home of the Chicago Bears, has experienced notable shifts in its housing market over the past decade. Located in central Illinois, Decatur has seen fluctuations in homeownership rates and housing prices, reflecting broader economic trends and local dynamics.
The homeownership rate in Decatur has shown variability over the years, with a general trend towards increased ownership. In 2013, the homeownership rate stood at 64%, and by 2022, it had risen to 67%. This increase coincided with changes in average home prices. In 2013, the average home price was $68,344, and it rose to $80,599 by 2022, representing a 17.9% increase over this period. Notably, there was a significant jump in average home prices between 2020 and 2022, with prices rising from $71,154 to $80,599, a 13.3% increase in just two years.
The relationship between federal interest rates and homeownership rates in Decatur follows a generally inverse pattern. For instance, when interest rates were at historic lows of 0.08% in 2021, the homeownership rate was 62%. As interest rates began to rise, reaching 1.68% in 2022, the homeownership rate increased to 67%. This trend suggests that Decatur residents may have been motivated to purchase homes while interest rates were still relatively low, anticipating future rate increases.
Renter percentages and average rent prices in Decatur have also shown interesting trends. The percentage of renters decreased from 40% in 2015 to 33% in 2022. During this period, average rent prices increased from $632 in 2015 to $776 in 2022, a 22.8% increase. This rise in rent prices, coupled with the decrease in the renter population, suggests a shift towards homeownership, possibly driven by the relative affordability of homes in Decatur compared to rising rent costs.
In 2023 and 2024, Decatur's housing market continued to evolve. The average home price in 2023 reached $84,636, a 5% increase from 2022. In 2024, prices further increased to $90,434, representing a 6.9% rise from 2023. These increases occurred despite significant hikes in federal interest rates, which rose to 5.02% in 2023 and 5.33% in 2024. This trend indicates a robust demand for housing in Decatur, even in the face of higher borrowing costs.
Looking ahead, predictive models suggest that Decatur's housing market will continue to see growth. Average home prices are projected to increase by approximately 4-5% annually over the next five years, potentially reaching around $110,000 by 2029. Rent prices are expected to follow a similar trajectory, with an estimated annual increase of 3-4%, potentially reaching an average of around $900 per month by 2029.
In summary, Decatur's housing market has demonstrated resilience and growth over the past decade. The city has seen an overall increase in homeownership rates, rising home prices, and increasing rent costs. Despite fluctuations in federal interest rates, the demand for housing in Decatur remains strong, with both ownership and rental markets showing upward trends. These patterns suggest a positive outlook for Decatur's real estate market in the coming years, with continued growth expected in both home values and rental prices.
