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Parma, Missouri: Rising Home Values and Ownership Rates Amid Interest Rate Fluctuations
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
Parma, Missouri, a small city in New Madrid County, has experienced significant changes in its homeownership rates and housing market dynamics over the past decade. The community has seen a general trend of increasing homeownership, with average home prices showing substantial growth, particularly in recent years. The homeownership rate in Parma has shown a remarkable upward trend, rising from 50% in 2013 to 68% in 2022. This increase coincides with fluctuations in average home prices. In 2016, the average home price was $27,326, which steadily increased to $49,158 by 2022, representing a substantial 80% growth over six years. This trend suggests a growing preference for homeownership in Parma, possibly driven by the relatively affordable housing market compared to larger urban areas.
Federal interest rates have played a significant role in shaping homeownership trends in Parma. The period from 2013 to 2016 saw historically low interest rates, hovering around 0.1% to 0.4%. This favorable lending environment likely contributed to the initial rise in homeownership from 50% in 2013 to 51% in 2016. As interest rates began to climb, reaching 1.83% by 2018, Parma still maintained a strong 54% homeownership rate, indicating a resilient local housing market.
Renter percentages in Parma have inversely mirrored the homeownership trend, decreasing from 50% in 2013 to 32% in 2022. Interestingly, average rent prices have shown volatility during this period. In 2013, the average rent was $494, which increased to a peak of $703 in 2016 before gradually declining to $561 in 2022. This decrease in average rent, coupled with the declining renter population, suggests a shift in the local rental market dynamics, possibly influenced by the increasing preference for homeownership.
The years 2023 and 2024 have seen continued growth in Parma's housing market. The average home price rose to $55,663 in 2023 and further increased to $57,636 in 2024, representing a 17% increase from 2022 levels. This growth occurred despite a significant rise in federal interest rates, which reached 5.02% in 2023 and 5.33% in 2024, highlighting the strong demand for housing in Parma.
Looking ahead, predictive models suggest that Parma's housing market will continue its upward trajectory. Average home prices are projected to increase by approximately 15-20% over the next five years, potentially reaching around $67,000 to $70,000 by 2029. Rent prices, while more difficult to predict due to recent volatility, are expected to stabilize and potentially see modest increases of 5-10% over the same period, possibly reaching an average of $590 to $620 per month.
In summary, Parma, Missouri, has experienced a significant shift towards homeownership over the past decade, with average home prices showing substantial growth. This trend has persisted even in the face of rising interest rates, indicating a robust local housing market. The rental market has seen a decrease in both the percentage of renters and average rent prices, further emphasizing the community's preference for homeownership. As Parma continues to evolve, these housing trends are likely to play a crucial role in shaping the city's demographic and economic landscape in the coming years.
