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Lima, Montana: Rising Home Values and Shifting Ownership Patterns in a Small Town
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
Lima, located in Montana, is a small community that has experienced fluctuations in population and housing dynamics over the past decade. The town has seen notable shifts in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local market conditions. Homeownership rates in Lima have shown a slight decline over the years, with some fluctuations. In 2013, the homeownership rate was 72%, which increased to 77% in 2015. However, by 2022, it had decreased to 74%. This trend coincides with changes in average home prices. In 2013, the average home price was $117,375, and it steadily increased to $240,667 by 2022, representing a substantial 105% increase over nine years. This significant rise in home prices may have contributed to the slight decrease in homeownership rates, as affordability became a growing concern for potential buyers.
The relationship between federal interest rates and homeownership rates in Lima shows some correlation. From 2013 to 2015, when interest rates were extremely low (0.11% to 0.13%), homeownership rates increased from 72% to 77%. As interest rates began to rise more significantly from 2016 onwards, reaching 1.68% in 2022, homeownership rates experienced some volatility but generally trended downward, settling at 74% in 2022. This trend aligns with the general principle that lower interest rates tend to encourage homeownership due to more affordable financing options.
Renter percentages in Lima have shown a slight increase over time, mirroring the decline in homeownership rates. In 2013, the renter-occupied rate was 26%, and it remained relatively stable until 2018 when it increased to 32%. By 2022, it had returned to 26%. Average rent prices have shown significant volatility during this period. In 2013, the average rent was $386, which increased dramatically to $760 in 2018, representing a 97% increase. However, by 2022, the average rent had decreased to $635, still 64% higher than the 2013 level. These fluctuations in rent prices may be influenced by changes in population, which varied from 103 in 2013 to 106 in 2022, with some years seeing lower numbers.
In 2023, the average home price in Lima reached $242,228, and in 2024, it further increased to $254,756. This represents a 5.2% increase from 2023 to 2024, indicating a continuing upward trend in home values. Interestingly, federal interest rates also saw a significant increase, rising from 5.02% in 2023 to 5.33% in 2024, which could potentially impact future homeownership rates and housing market dynamics.
Looking ahead, based on the historical data and current trends, we can project that average home prices in Lima may continue to rise over the next five years, potentially reaching around $300,000 by 2029. However, the rate of increase might slow down due to higher interest rates. Average rent prices could stabilize or see moderate increases, potentially reaching $700-$750 per month by 2029, assuming population and economic conditions remain relatively stable.
In summary, Lima has experienced a gradual shift towards slightly lower homeownership rates and higher renter percentages over the past decade. This trend has been accompanied by significant increases in both average home prices and rent prices, despite some recent moderation in rental costs. The interplay between federal interest rates, housing affordability, and local economic conditions will likely continue to shape the housing market dynamics in Lima in the coming years.
