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Lancaster: Rising Home Values and Ownership Rates Defy Population Decline
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
Lancaster, located in New Hampshire, is a small community that has experienced significant changes in its housing market over the past decade. The city has seen a notable shift towards homeownership, with average home prices steadily increasing while average rent prices have shown more moderate growth.
The trend of homeownership in Lancaster has been on an upward trajectory since 2013. In 2013, the homeownership rate was 71%, which increased to 78% by 2022. This rise in homeownership coincided with a substantial increase in average home prices. In 2013, the average home price was $138,717, and by 2022, it had risen to $262,235, representing a 89% increase over nine years. This trend suggests that despite rising home prices, more residents were able to enter the housing market as owners.
The relationship between federal interest rates and homeownership rates in Lancaster shows an interesting pattern. From 2013 to 2016, when interest rates were extremely low (ranging from 0.11% to 0.40%), homeownership rates remained stable at around 69-71%. However, as interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), homeownership rates actually increased from 70% to 75%. This suggests that factors beyond interest rates, such as local economic conditions or housing policies, may have played a more significant role in driving homeownership in Lancaster.
The rental market in Lancaster has shown a contrasting trend to homeownership. As the percentage of renters decreased from 29% in 2013 to 22% in 2022, average rent prices increased from $706 in 2013 to $887 in 2022, a 26% increase. This trend could be attributed to a shrinking rental market with potentially higher-quality units remaining, or increased demand for the limited rental properties available as the overall population declined from 3,448 in 2013 to 3,223 in 2022.
In 2023 and 2024, Lancaster experienced further increases in average home prices. The average home price reached $273,545 in 2023 and $282,723 in 2024, representing a 4.3% and 3.4% year-over-year increase respectively. These increases occurred despite federal interest rates rising to 5.02% in 2023 and 5.33% in 2024, which typically would be expected to cool the housing market.
Looking ahead, based on the consistent upward trend in home prices and the resilience of the market in the face of rising interest rates, it's projected that average home prices in Lancaster will continue to increase over the next five years, albeit potentially at a more moderate pace. Average home prices could reach around $320,000 by 2029. For rent prices, the trend suggests a continued gradual increase, potentially reaching an average of around $1,000 per month by 2029.
In summary, Lancaster has demonstrated a strong shift towards homeownership despite rising home prices, with a corresponding decrease in the rental market share. The housing market has shown resilience in the face of fluctuating interest rates, suggesting local factors play a significant role in shaping housing trends in this community. The continued rise in both home prices and rent, even in a context of population decline, points to a complex and dynamic housing market in Lancaster.
