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Oak Hill's Soaring Home Values: Resilient Growth Amidst Rising Interest Rates
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
Oak Hill, a neighborhood in Pawtucket, Rhode Island, has experienced significant changes in homeownership and housing costs over the past decade. From 2013 to 2022, the area saw a substantial increase in homeownership rates, accompanied by considerable rises in average home prices and rent costs. The relationship between homeownership percentage and average home prices in Oak Hill demonstrates a strong positive correlation. In 2013, the homeownership rate stood at 44%, with an average home price of $206,508. By 2022, these figures had risen to 57% and $441,023, respectively. This represents a 13 percentage point increase in homeownership and a 113.6% rise in average home prices over nine years. The most notable jump in homeownership occurred between 2017 and 2018, increasing from 47% to 52%, coinciding with a period of relatively low federal interest rates. Federal interest rates have played a crucial role in Oak Hill's homeownership trends. From 2013 to 2016, when interest rates were at historic lows (below 0.5%), homeownership rates gradually increased from 44% to 47%. As interest rates began to rise in 2017 and 2018, reaching 1.83% by the end of 2018, homeownership continued to grow, likely due to anticipation of further rate increases. The sharp drop in interest rates in 2020 and 2021 (to 0.08%) corresponded with a continued increase in homeownership, reaching 57% by 2022.
The renter percentage in Oak Hill has inversely mirrored the homeownership trend, decreasing from 56% in 2013 to 43% in 2022. Despite this decline, average rent prices have shown a general upward trend. In 2013, the average rent was $999, which increased to $1,062 by 2022, representing a 6.3% rise. The highest average rent was recorded in 2021 at $1,134, coinciding with a population peak of 5,985 residents. This suggests that despite fewer renters, demand for rental properties remained strong, possibly due to limited housing inventory and increasing home prices.
In 2023, the average home price in Oak Hill reached $474,031, a 7.5% increase from 2022. This growth occurred despite a significant rise in federal interest rates to 5.02%. The trend continued into 2024, with average home prices climbing to $499,160, marking a 5.3% increase from the previous year. Federal interest rates in 2024 stand at 5.33%, the highest level since 2007. These figures indicate a resilient housing market in Oak Hill, with home prices continuing to appreciate even in a high-interest rate environment.
Looking ahead, predictive models suggest that average home prices in Oak Hill may continue to rise over the next five years, albeit at a potentially slower pace due to higher interest rates. Average rent prices are also expected to increase, driven by ongoing demand and the overall upward trend in housing costs. However, the rate of increase for both home prices and rents may moderate compared to the rapid growth seen in recent years.
In summary, Oak Hill has experienced a significant shift towards homeownership from 2013 to 2022, with a corresponding increase in average home prices. Despite rising interest rates, the neighborhood's housing market has shown resilience, with continued price appreciation in 2023 and 2024. The rental market, while shrinking in terms of percentage, has maintained strong average rent prices. These trends reflect a dynamic and evolving real estate landscape in Oak Hill, with potential for continued growth in both the homeownership and rental sectors.
