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Lexington, North Carolina: Barbecue City's Rising Home Values and Shifting Ownership Trends
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
Lexington, a vibrant city in North Carolina, has experienced notable shifts in its housing market over the past decade. Known for its rich barbecue tradition and as the self-proclaimed "Barbecue Capital of the World," Lexington has seen fluctuations in homeownership rates and significant changes in average home and rent prices.
From 2013 to 2022, Lexington witnessed a gradual decline in homeownership rates, dropping from 57% to 55%. This trend coincided with a substantial increase in average home prices. In 2013, the average home price was $120,115, but by 2022, it had risen dramatically to $230,644, representing a 92% increase over nine years. This sharp rise in home prices likely contributed to the slight decrease in homeownership rates, as affordability became a growing concern for potential buyers.
Federal interest rates played a significant role in shaping homeownership trends during this period. From 2013 to 2016, interest rates remained exceptionally low, hovering between 0.09% and 0.40%. This period of low rates corresponded with relatively stable homeownership rates in Lexington, ranging from 57% to 54%. However, as interest rates began to rise more sharply from 2017 (1%) to 2019 (2.16%), homeownership rates in Lexington continued to decline, reaching 52% by 2019 and remaining at that level through 2020.
The rental market in Lexington showed an inverse relationship to homeownership trends. As homeownership rates decreased, the percentage of renters increased from 43% in 2013 to 45% in 2022. This shift was accompanied by a steady rise in average rent prices. In 2013, the average rent was $678 per month, climbing to $731 by 2022, an increase of 7.8%. The most significant jump in rent occurred between 2020 and 2021, when average rent rose from $740 to $764, possibly reflecting increased demand for rental properties as homeownership became less attainable for some residents.
In 2023 and 2024, Lexington's housing market continued to evolve. The average home price in 2023 reached $245,301, a 6.4% increase from 2022. By 2024, it further rose to $254,852, marking a 3.9% increase from the previous year. Concurrently, federal interest rates climbed significantly, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates may impact future homeownership trends, potentially making mortgages more expensive and affecting buyers' purchasing power.
Looking ahead, based on the observed trends, we can anticipate continued growth in both home prices and rent in Lexington over the next five years. Average home prices are projected to increase by approximately 3-5% annually, potentially reaching around $300,000 by 2029. Average rent prices are expected to rise at a similar rate, potentially surpassing $850 per month within the same timeframe. However, these projections may be influenced by various factors, including economic conditions, local development, and changes in federal interest rates.
In summary, Lexington's housing market has been characterized by rising home and rent prices, a slight decline in homeownership rates, and an increase in the renter population. The interplay between federal interest rates, housing affordability, and demographic shifts continues to shape the city's real estate landscape, presenting both challenges and opportunities for residents and potential homebuyers in this historic North Carolina city.
