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Memphis Home Values and Ownership: Musical City's Housing Dynamics
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Memphis, Tennessee, a city steeped in musical heritage and known as the birthplace of blues, rock 'n' roll, and soul music, has experienced notable shifts in its housing market over the past decade. The city's homeownership rates have fluctuated, while average home prices and average rent prices have shown a general upward trend. This analysis will delve into these trends and their interrelationships.
The homeownership rate in Memphis has seen a slight decline over the years, dropping from 48% in 2013 to 46% in 2022. During this same period, average home prices have experienced significant growth. In 2013, the average home price in Memphis was $61,687. By 2022, it had increased dramatically to $154,824, representing a remarkable 151% increase over nine years. This inverse relationship between homeownership rates and average home prices suggests that rising property values may have made homeownership less attainable for some Memphis residents.
Federal interest rates have played a role in shaping homeownership trends in Memphis. From 2013 to 2016, when interest rates were exceptionally low (ranging from 0.11% to 0.40%), the homeownership rate in Memphis remained relatively stable at around 47-48%. However, as interest rates began to rise more significantly from 2017 onwards, reaching 1.68% in 2022, the homeownership rate in Memphis dipped to 46%. This trend aligns with the general principle that lower interest rates tend to encourage homeownership due to more affordable financing options.
The percentage of renters in Memphis has increased from 52% in 2013 to 54% in 2022. Concurrent with this rise, average rent prices have also shown an upward trend. In 2013, the average rent in Memphis was $800 per month. By 2022, it had climbed to $1,098, representing a 37.25% increase over nine years. The population of Memphis has decreased slightly during this period, from 653,450 in 2013 to 621,050 in 2022. Despite this population decline, the increase in both the percentage of renters and average rent prices suggests a tightening rental market in the city.
Looking at the most recent data, the average home price in Memphis slightly decreased from $154,824 in 2022 to $154,151 in 2023, and further declined to $150,043 in 2024. This represents a modest 3.1% decrease from 2022 to 2024. Simultaneously, federal interest rates have risen significantly, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates may be contributing to the slight cooling in home prices.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in Memphis will continue to grow, albeit at a more moderate pace than seen in recent years. The average home price is projected to reach approximately $170,000 by 2029. Average rent prices are also expected to continue their upward trajectory, potentially reaching around $1,300 per month by 2029. These projections assume a gradual stabilization of interest rates and continued economic growth in the region.
In summary, Memphis has experienced a slight decrease in homeownership rates alongside substantial increases in both average home prices and average rent prices over the past decade. The inverse relationship between homeownership rates and property values, coupled with the impact of fluctuating interest rates, has shaped the city's housing market dynamics. As Memphis continues to evolve, these trends will likely play a crucial role in determining housing affordability and accessibility for its residents in the coming years.
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