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Madison, Missouri: Rising Home Values and Ownership Rates in a Small Community
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
Madison, Missouri, is a small community that has experienced notable fluctuations in its population and housing market over the past decade. The city has seen a general trend of increasing homeownership rates, rising average home prices, and fluctuating average rent prices, reflecting the dynamic nature of its real estate landscape.
The homeownership rate in Madison has shown a significant upward trend, increasing from 73% in 2016 to 84% in 2022. This rise in homeownership coincides with a steady increase in average home prices. In 2012, the average home price was $104,726, and by 2022, it had risen to $181,487, representing a substantial 73% increase over a decade. This correlation suggests that despite rising prices, more residents have been able to enter the housing market as owners.
The relationship between federal interest rates and homeownership rates in Madison appears to follow the general trend of lower interest rates encouraging homeownership. For instance, as interest rates remained low from 2012 to 2016 (ranging from 0.09% to 0.40%), the city saw a gradual increase in homeownership. The homeownership rate jumped from 73% in 2016 to 79% in 2017 as interest rates rose to 1%, possibly indicating a rush to purchase homes before further rate increases.
Renter percentages in Madison have generally decreased as homeownership rates increased. The renter-occupied percentage dropped from 27% in 2016 to 16% in 2022. Interestingly, average rent prices have shown an upward trend despite the decreasing renter population. The average rent increased from $516 in 2015 to $699 in 2022, a 35% rise. This trend could be attributed to a combination of factors, including improved rental property quality or a shortage of rental units as more properties transitioned to owner-occupied status.
In 2023, the average home price in Madison reached $184,879, and in 2024, it further increased to $191,958. This continued upward trajectory in home prices occurs alongside a significant rise in federal interest rates, which stood at 5.02% in 2023 and 5.33% in 2024. Despite these higher interest rates, the housing market in Madison appears to remain robust, with prices continuing to appreciate.
Looking ahead, based on the historical data and current trends, we can project that average home prices in Madison will likely continue to rise over the next five years, albeit potentially at a more moderate pace due to higher interest rates. Average rent prices may also continue their upward trend, especially if the rental market tightens further due to increasing homeownership rates.
In summary, Madison has experienced a notable shift towards homeownership, with a corresponding increase in average home prices. The rental market has seen decreasing occupancy but rising average rents. These trends, coupled with the interplay of federal interest rates, paint a picture of a dynamic real estate market in this small Missouri city, with a strong preference for homeownership driving much of the change.
