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Des Moines Housing Market: Rising Home Values and Ownership Trends in Iowa's 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
Des Moines, the capital city of Iowa, is a vibrant metropolitan area known for its thriving financial services industry and cultural attractions. With a population of 210,936 in 2022, this city has experienced notable shifts in homeownership rates and housing costs over the past decade. The overall trend shows a slight increase in homeownership, rising average home prices, and steadily increasing average rent prices.
The homeownership rate in Des Moines has shown a gradual upward trend from 2013 to 2022. In 2013, 60% of residents were homeowners, and this figure increased to 64% by 2021, before settling at 60% in 2022. Concurrently, average home prices have seen significant growth. In 2013, the average home price was $100,477, which steadily increased to $186,794 by 2022, representing an impressive 85.9% increase over this period. This trend suggests a strong correlation between rising home values and homeownership rates, as residents may have been motivated to purchase homes as an investment in an appreciating market.
Federal interest rates have played a crucial role in shaping homeownership trends in Des Moines. From 2013 to 2020, interest rates remained relatively low, ranging from 0.09% to 2.16%. This period coincided with the increase in homeownership rates, as low interest rates made mortgages more affordable for potential buyers. The homeownership rate peaked at 64% in 2021 when the interest rate was at a mere 0.08%, demonstrating how favorable lending conditions can stimulate home purchases.
Renter percentages in Des Moines have fluctuated inversely to homeownership rates, decreasing from 40% in 2013 to 36% in 2021, before rising back to 40% in 2022. Average rent prices have shown a consistent upward trajectory, increasing from $734 in 2013 to $982 in 2022, a 33.8% rise. This trend indicates that despite rising rents, a significant portion of the population continues to rent, possibly due to factors such as job mobility or inability to afford home purchases in an increasingly expensive market.
In 2023, the average home price in Des Moines reached $195,390, with interest rates climbing to 5.02%. By 2024, the average home price further increased to $203,754, while interest rates rose to 5.33%. These figures represent a continuation of the upward trend in home prices, coupled with a significant increase in interest rates, which could potentially impact affordability and future homeownership rates.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in Des Moines will continue to rise, potentially reaching around $240,000 by 2029. Average rent prices are also expected to increase, potentially surpassing $1,200 per month within the same timeframe. These projections are based on historical trends and current market conditions.
In summary, Des Moines has experienced a notable increase in both homeownership rates and housing costs over the past decade. The relationship between low interest rates and higher homeownership rates has been evident, particularly from 2013 to 2021. However, the recent spike in interest rates may challenge this trend moving forward. The rental market has shown resilience with steadily increasing prices, suggesting ongoing demand for rental properties despite the growth in homeownership. As the city continues to evolve, these housing trends will play a crucial role in shaping its urban landscape and economic dynamics.
