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Homestead: Rising Home Values Amidst Declining Ownership in Former Steel Town
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Homestead, located in Pennsylvania, is a small urban community with a rich history tied to the steel industry. Over the past decade, this borough has experienced significant shifts in its housing landscape, marked by changing homeownership rates and fluctuating average home and rent prices. The overall trend shows a decline in homeownership, accompanied by rising average home prices and rent costs.
The relationship between homeownership rates and average home prices in Homestead reveals an interesting dynamic. In 2013, the homeownership rate stood at 34%, with an average home price of $30,765. As average home prices steadily increased, reaching $50,320 by 2020, the homeownership rate experienced fluctuations, peaking at 40% in 2014 and 2017 before declining to 29% in 2020. This inverse relationship suggests that rising home prices may have made homeownership less attainable for many residents. By 2022, the homeownership rate further decreased to 28%, while the average home price surged to $73,153, representing a 138% increase from 2013.
Federal interest rates have played a significant role in shaping homeownership trends in Homestead. The period from 2013 to 2016 saw historically low interest rates, ranging from 0.09% to 0.4%. During this time, homeownership rates remained relatively stable, fluctuating between 34% and 40%. As interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, homeownership rates showed a general downward trend, dropping to 28% by 2022. This pattern aligns with the well-established trend that lower interest rates typically encourage homeownership due to more affordable financing options.
The renter population in Homestead has grown substantially over the years, with the percentage of renters increasing from 66% in 2013 to 72% in 2022. This shift coincided with a general upward trend in average rent prices. In 2013, the average rent was $755, which decreased slightly to $683 in 2016. However, from 2017 onwards, rent prices began to climb steadily, reaching $908 by 2022, representing a 20% increase from 2013. The rising rent prices, coupled with the growing renter population, suggest increasing demand for rental properties in the area.
In 2023 and 2024, Homestead experienced further changes in its housing market. The average home price slightly decreased to $71,211 in 2023 but then rebounded to $80,724 in 2024, marking a 13.4% increase from the previous year. Concurrently, federal interest rates rose significantly, reaching 5.02% in 2023 and 5.33% in 2024, the highest levels in over a decade. These higher interest rates may further impact homeownership trends in the coming years.
Looking ahead, predictive models suggest that average home prices in Homestead are likely to continue their upward trajectory over the next five years, potentially reaching around $95,000 by 2029. Average rent prices are also expected to rise, potentially surpassing $1,100 per month within the same timeframe. These projections are based on historical trends and current market conditions.
In summary, Homestead has witnessed a significant shift towards a renter-dominated housing market over the past decade. The decline in homeownership rates, coupled with rising average home prices and rent costs, reflects the changing economic landscape of the area. The recent spike in federal interest rates may further challenge homeownership prospects, potentially reinforcing the trend towards renting in the coming years.
