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Palestine, Arkansas: Rising Home Values and Stable Ownership 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
Palestine, Arkansas, is a small community with a population of 1,018 as of 2022. The city has experienced fluctuations in homeownership rates and housing prices over the past decade, reflecting broader economic trends and local market conditions.
From 2013 to 2022, Palestine saw a slight increase in homeownership rates, rising from 65% to 66%. During this period, average home prices in the city experienced significant growth. In 2013, the average home price was $72,349, which steadily increased to $119,918 by 2022, representing a 65.7% increase over nine years. This upward trend in home prices coincided with the overall increase in homeownership, suggesting that despite rising costs, residents were still able and willing to purchase homes.
Federal interest rates played a role in homeownership trends in Palestine. From 2013 to 2016, when interest rates were exceptionally low (ranging from 0.11% to 0.40%), homeownership rates fluctuated between 56% and 65%. As interest rates began to rise more significantly from 2017 onwards, reaching 1.68% in 2022, homeownership rates stabilized and even increased slightly to 66%. This trend suggests that while low interest rates initially encouraged homeownership, other factors such as local economic conditions and housing availability may have had a more substantial impact on ownership rates in recent years.
Renter percentages in Palestine showed an inverse relationship to homeownership rates, naturally decreasing as homeownership increased. In 2013, 35% of residents were renters, which peaked at 44% in 2015 and 2017 before declining to 34% by 2022. Average rent prices generally increased during this period, rising from $442 in 2013 to $716 in 2022, a 62% increase. Despite the rising rent costs, the percentage of renters decreased, possibly due to residents transitioning to homeownership or changes in the local population composition.
In 2023 and 2024, average home prices in Palestine showed a slight decline, with values of $119,581 and $118,339 respectively. This represents a minor decrease of about 1% from the 2022 peak. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, potentially influencing the slight cooling in the housing market.
Looking ahead, predictive models suggest that average home prices in Palestine may continue to experience modest growth over the next five years, albeit at a slower rate than observed in the past decade. Average rent prices are likely to follow a similar trajectory, with gradual increases expected. However, the pace of these increases may be tempered by factors such as population changes, local economic conditions, and broader market trends.
In summary, Palestine has demonstrated resilience in its housing market, with increasing homeownership rates despite rising home prices. The relationship between federal interest rates and homeownership has been complex, with local factors playing a significant role. The rental market has seen substantial price increases, yet a decreasing proportion of renters. As the city moves forward, it is likely to see continued, though possibly more modest, growth in both home prices and rent costs, reflecting the ongoing evolution of this small Arkansas community.
