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Hillman, Birmingham: Homeownership Decline Amid Rising Property Values
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
The Hillman neighborhood in Birmingham, Alabama has undergone significant changes in its housing market over the past decade. This area has experienced a notable decline in population, fluctuating homeownership rates, and changes in average home and rent prices. These shifts reflect broader economic trends and have reshaped the neighborhood's demographic landscape.
Homeownership rates in Hillman have shown a downward trend, decreasing from 84% in 2020 to 67% in 2022. This decline coincides with a substantial increase in average home prices, which rose from $35,981 in 2020 to $56,291 in 2022, representing a 56.4% increase in just two years. This inverse relationship suggests that rising home prices may have made homeownership less attainable for some residents.
The trend in homeownership rates appears to be influenced by federal interest rates. When interest rates were low at 0.38% in 2020, homeownership in Hillman peaked at 84%. As interest rates rose to 1.68% in 2022, homeownership declined to 67%. This pattern aligns with the general economic principle that lower interest rates tend to encourage homeownership by making mortgages more affordable.
Renter percentages in Hillman have shown an upward trend, increasing from 15% in 2020 to 33% in 2022. This rise in renters corresponds with fluctuations in average rent prices. The average rent decreased from $457 in 2020 to $358 in 2021, before surging to $674 in 2022. The sharp increase in rent prices in 2022 coincides with the significant rise in the renter population, potentially reflecting increased demand for rental properties as homeownership became less accessible.
The most recent data shows that the average home price in Hillman reached $57,664 in 2023, indicating continued growth. However, in 2024, there was a slight decrease to $57,248. This minor downturn coincides with a further increase in federal interest rates, which rose to 5.02% in 2023 and 5.33% in 2024. These higher interest rates may be contributing to a cooling in the housing market.
Applying predictive models to forecast 5-year trends, it is anticipated that average home prices in Hillman may continue to rise, but at a more moderate pace than seen in recent years. The current high interest rates could temper rapid price growth. For rent prices, the forecast suggests a potential stabilization or slight increase, assuming the trend of rising renter percentages continues.
In summary, Hillman has experienced a significant shift in its housing landscape. The neighborhood has seen a decline in homeownership rates coupled with rising home prices, while the renter population has increased alongside fluctuating rent prices. These trends appear to be influenced by broader economic factors such as interest rates and may continue to shape the neighborhood's housing market in the coming years.
