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Home Values Soar as Ownership Declines: Reading's Railroad City Faces Housing Shifts
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Reading, Pennsylvania, a city known for its historical significance in the American railroad industry, has experienced notable shifts in its housing landscape over the past decade. The city has seen a general trend towards increased renting, with homeownership rates fluctuating but overall decreasing. Meanwhile, both average home prices and average rent prices have shown an upward trajectory, reflecting changing market dynamics and economic conditions.
The homeownership rate in Reading has experienced a gradual decline from 2013 to 2022, with some fluctuations. In 2013, 42% of housing units were owner-occupied, which decreased to 40% by 2022. This decline coincides with a significant increase in average home prices. In 2013, the average home price was $88,741, which rose dramatically to $210,298 by 2022, representing a 137% increase over nine years. This substantial rise in home prices may have contributed to the declining homeownership rate, as affordability became a growing concern for potential buyers.
Federal interest rates play a crucial role in homeownership trends. From 2013 to 2016, interest rates remained relatively low, hovering around 0.1% to 0.4%. During this period, homeownership rates in Reading fluctuated between 38% and 42%. As interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), homeownership rates in Reading showed a slight decline, reaching 38% in 2019. This trend aligns with the general principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
The percentage of renters in Reading has generally increased from 2013 to 2022, rising from 58% to 60%. This trend corresponds with an increase in average rent prices. In 2013, the average rent was $765, which increased to $987 by 2022, representing a 29% rise. The growing renter population, coupled with rising rent prices, suggests a strong demand for rental properties in the city. This demand may be driven by factors such as the increasing population, which grew from 87,894 in 2013 to 94,860 in 2022, and the potential difficulty for some residents to transition to homeownership due to rising home prices.
As of 2024, the average home price in Reading has reached $240,788, continuing the upward trend observed in previous years. The federal interest rate for 2024 stands at 5.33%, which is significantly higher than the rates seen in the early 2010s. This higher interest rate environment may pose challenges for potential homebuyers, potentially impacting future homeownership rates in the city.
Looking ahead, based on the observed trends, it's projected that average home prices in Reading will continue to rise over the next five years, potentially reaching around $300,000 by 2029. Average rent prices are also expected to increase, possibly surpassing $1,200 per month within the same timeframe. These projections assume a continuation of current economic conditions and housing market trends.
In summary, Reading has experienced a shift towards a higher proportion of renters, accompanied by rising average home and rent prices. The interplay between federal interest rates, housing affordability, and population growth has shaped these trends. The city's housing market has shown resilience and growth, with substantial increases in property values over the past decade. As Reading continues to evolve, these housing trends will play a crucial role in shaping the city's future demographic and economic landscape.
