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Melbourne, Florida: Rising Home Values and Ownership Rates in a Coastal City
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
Melbourne, located in Florida, is a vibrant coastal community known for its beautiful beaches and proximity to the Kennedy Space Center. This city has experienced significant growth and changes in its housing market over the past decade, with notable trends in homeownership rates, average home prices, and average rent prices. The homeownership rate in Melbourne has shown an overall increasing trend from 2013 to 2022. In 2013, the homeownership rate was 54%, which steadily increased to 62% by 2022. This upward trend coincided with a substantial rise in average home prices. In 2013, the average home price was $139,917, which more than doubled to $356,928 by 2022. This strong correlation suggests that as property values increased, more residents were motivated to invest in homeownership.
Federal interest rates have played a crucial role in shaping homeownership trends in Melbourne. From 2013 to 2020, interest rates remained relatively low, ranging from 0.09% to 2.16%. This period of low interest rates corresponded with the increase in homeownership rates from 54% in 2013 to 62% in 2020. The accessibility of affordable financing options likely contributed to this growth in homeownership.
Renter percentages in Melbourne have generally decreased as homeownership rates increased. In 2013, 46% of residents were renters, which declined to 38% by 2022. Despite this decrease in the renter population, average rent prices have consistently risen. The average rent price increased from $812 in 2013 to $1,350 in 2022, representing a 66% increase over this period. This trend suggests that despite fewer renters, demand for rental properties remained strong, possibly due to population growth and limited rental inventory.
In 2023 and 2024, Melbourne's housing market continued to evolve. The average home price in 2023 reached $371,878, and in 2024 it further increased to $377,985. Concurrently, federal interest rates rose significantly, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates may impact future homeownership trends and housing affordability in the city.
Looking ahead, based on historical trends and current market conditions, we can expect average home prices in Melbourne to continue rising, albeit at a potentially slower rate due to higher interest rates. A 5-year forecast suggests average home prices could reach approximately $450,000 by 2029. Average rent prices are also projected to increase, potentially reaching around $1,700 per month in the same timeframe. However, these projections may be influenced by various factors including economic conditions, population growth, and housing supply.
In summary, Melbourne has experienced a significant increase in homeownership rates and property values over the past decade. The correlation between low interest rates and rising homeownership, coupled with steadily increasing average home and rent prices, highlights the dynamic nature of the city's housing market. As the city continues to grow and evolve, these trends will likely shape the future of housing in Melbourne, Florida.
