Florence, Alabama, a city renowned for its musical heritage and as the birthplace of W.C. Handy, has experienced significant changes in its housing market over the past decade. Located in the northwest corner of the state, Florence has seen a trend towards increased renting and rising home prices. The homeownership rate in Florence has declined from 58% in 2013 to 53% in 2022, coinciding with a substantial increase in average home prices. From 2010 to 2022, average home prices rose from $100,560 to $185,555, representing an 84.5% increase over 12 years. The most significant growth occurred between 2020 and 2022, with average home prices surging by 28.4% in just two years.

Federal interest rates have influenced homeownership trends in Florence. The period of historically low interest rates from 2010 to 2021, ranging from 0.08% to 0.40%, corresponded with the city's rising home prices. However, despite these low rates, the homeownership percentage continued to decline, indicating that factors such as affordability and changing demographics may have played a more significant role than interest rates alone. As homeownership decreased, the percentage of renters in Florence increased from 42% in 2013 to 47% in 2022. This shift towards renting was accompanied by a steady rise in average rent prices, which grew from $592 in 2013 to $734 in 2022, a 24% increase over nine years. The city's population also grew during this period, from 42,521 in 2013 to 44,265 in 2022, potentially contributing to the increased demand for rental properties.

In 2023 and 2024, the housing market in Florence continued its upward trajectory. The average home price reached $192,565 in 2023 and further increased to $198,631 in 2024, representing a 7% growth over two years. This occurred despite a significant rise in federal interest rates, which jumped to 5.02% in 2023 and 5.33% in 2024, potentially impacting affordability for prospective homebuyers.