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Rising Home Values and Declining Ownership: Cumberland's Shifting Housing Market
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
Cumberland, Kentucky, is a small urban center located in the eastern part of the state. With a population of 3,673 in 2022 and covering an area of 3.11 square miles, it offers a relatively dense living environment. Over the past decade, Cumberland has experienced notable shifts in homeownership rates and housing prices, reflecting broader economic trends and local market dynamics.
The homeownership rate in Cumberland has seen a general decline since 2013. In 2013, 66% of residents owned their homes, but by 2022, this figure had dropped to 57%. This decline coincides with a significant increase in average home prices. In 2015, the average home price was $29,538, and by 2022, it had risen to $42,364, representing a 43.4% increase over seven years.
The relationship between federal interest rates and homeownership rates in Cumberland shows some correlation. As interest rates remained low from 2013 to 2016 (around 0.1% to 0.4%), homeownership rates were relatively stable, ranging from 66% to 59%. However, as interest rates began to rise more significantly from 2017 onwards, reaching 1.68% in 2022, homeownership rates continued to decline, reaching 57% in 2022. This trend suggests that rising interest rates may have contributed to making homeownership less affordable for some residents.
Renter percentages in Cumberland have shown an inverse relationship to homeownership rates, increasing from 34% in 2013 to 43% in 2022. Interestingly, average rent prices have also risen during this period, albeit with some fluctuations. In 2013, the average rent was $356, dropping slightly to $338 in 2016 before rising to $452 in 2022. This represents a 27% increase in average rent from 2013 to 2022. The increase in both renter percentages and rent prices, despite a declining population from 2013 to 2022, suggests a tightening rental market in Cumberland.
In 2023 and 2024, Cumberland has experienced a significant surge in average home prices. The average home price jumped to $48,695 in 2023 and further increased to $52,665 in 2024, representing a substantial 24.3% increase from 2022 to 2024. This rapid appreciation coincides with a sharp rise in federal interest rates, which reached 5.02% in 2023 and 5.33% in 2024. These high interest rates, combined with rising home prices, may further impact affordability and homeownership rates in the city.
Looking ahead, based on the observed trends, it's projected that average home prices in Cumberland will continue to rise over the next five years, potentially reaching around $65,000 by 2029. Average rent prices are also expected to increase, possibly surpassing $550 per month in the same timeframe. These projections assume a continuation of current economic conditions and local market trends.
In summary, Cumberland has experienced a shift towards renting, with declining homeownership rates and increasing average home and rent prices. The sharp rise in home prices and interest rates in recent years presents challenges for potential homebuyers, while the rental market has tightened. These trends suggest a changing housing landscape in Cumberland, with affordability becoming an increasingly important factor for residents.
