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Melbourne, Arkansas: Rising Home Values and Shifting Ownership in a Small Dynamic Community
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Melbourne, Arkansas, a small city in the Ozark Mountains, has experienced significant changes in its housing market over the past decade. This analysis examines trends in homeownership rates, average home prices, and average rent prices, providing insights into the city's real estate dynamics. Homeownership rates in Melbourne fluctuated between 2013 and 2022. Starting at 70% in 2013, the rate peaked at 75% in 2017 and 2018 before declining to 67% by 2022. Concurrently, average home prices showed a consistent upward trend. From 2016 to 2022, average home prices increased from $97,256 to $154,519, representing a substantial 58.9% rise over six years. The relationship between federal interest rates and homeownership rates in Melbourne reveals some correlation. As interest rates remained low from 2013 to 2016, around 0.1%, homeownership rates increased from 70% to 73%. The slight rise in interest rates to 1% in 2017 coincided with the peak homeownership rate of 75%. However, as interest rates climbed to 1.68% in 2022, homeownership rates declined to 67%, suggesting that higher borrowing costs may have affected affordability for potential buyers.
Renter percentages in Melbourne inversely mirrored homeownership trends, ranging from 25% to 33% between 2013 and 2022. Average rent prices showed moderate fluctuations during this period. In 2013, the average rent was $467, peaking at $500 in 2017 before slightly decreasing to $497 in 2022. The city's population growth from 2,844 in 2013 to 3,200 in 2022 may have contributed to the overall upward pressure on rent prices, despite some year-to-year variations.
The most recent data shows that average home prices in Melbourne continued to rise in 2023 and 2024, reaching $156,084 and $161,088 respectively. This represents a modest 3.2% increase from 2023 to 2024. Federal interest rates have also increased significantly, standing at 5.02% in 2023 and 5.33% in 2024, which could potentially impact future homeownership rates and housing affordability in the city.
Applying predictive models to forecast 5-year trends, average home prices in Melbourne are expected to continue their upward trajectory, potentially reaching around $180,000 by 2029. This projection is based on the consistent growth observed from 2016 to 2024. Average rent prices are anticipated to follow a similar pattern, potentially increasing to approximately $550 by 2029, assuming a continuation of the moderate growth trend observed in recent years.
In summary, Melbourne's housing market has demonstrated resilience and growth over the past decade. The city has maintained relatively high homeownership rates despite rising home prices and fluctuating interest rates. The rental market has shown stability with gradual increases in average rents. As Melbourne continues to grow, these trends suggest a dynamic and evolving real estate landscape that balances homeownership opportunities with a stable rental market.
