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Rising Home Values and Declining Ownership in Montgomery, Illinois: A Decade of Housing Market Shifts
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Montgomery, Illinois: A Suburban Community in Transition Montgomery, located in Illinois, is a suburban community that has experienced significant demographic and housing market changes over the past decade. The city, spanning 9.54 square miles, has seen fluctuations in homeownership rates and housing prices, reflecting broader economic trends and local market dynamics.
Declining Homeownership and Rising Home Prices The homeownership rate in Montgomery has shown a general decline from 2013 to 2022. In 2013, the city boasted a high 79% homeownership rate. However, by 2022, this figure had decreased to 69%. This downward trend in homeownership coincided with a substantial increase in average home prices. In 2013, the average home price was $150,096, but by 2022, it had risen dramatically to $267,474, representing a 78% increase over nine years.
Impact of Federal Interest Rates on Homeownership The relationship between federal interest rates and homeownership rates in Montgomery follows expected patterns. During periods of low interest rates, such as from 2013 to 2016 when rates remained below 0.5%, homeownership rates remained relatively stable around 75-79%. However, as interest rates began to climb from 2017 onwards, reaching 1.68% in 2022, homeownership rates started to decline more sharply, falling to 69% by 2022. This trend aligns with the general economic principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
Rental Market Trends Renter percentages in Montgomery have inversely mirrored the homeownership trends, increasing from 21% in 2013 to 30% in 2022. This shift towards renting has been accompanied by a steady rise in average rent prices. In 2013, the average rent was $1,340, which increased to $1,451 by 2022, representing an 8.3% increase. It's worth noting that the population of Montgomery peaked at 35,757 in 2014 and has since decreased to 33,309 in 2022, which may have influenced the rental market dynamics.
Current Housing Market Status As of 2024, the average home price in Montgomery has reached $291,870, continuing the upward trend observed in previous years. This represents a 9.1% increase from the 2022 average price. Concurrently, the federal interest rate has risen to 5.33% in 2024, significantly higher than the 1.68% rate in 2022. This substantial increase in interest rates could potentially impact future homeownership rates and housing market activity in the city.
Future Projections Looking ahead, based on the historical data and current trends, we can project that average home prices in Montgomery may continue to rise over the next five years, potentially reaching around $325,000 to $350,000 by 2029. Average rent prices are also likely to increase, possibly reaching $1,600 to $1,700 per month in the same timeframe. However, these projections assume a continuation of current economic conditions and local market factors.
Conclusion In summary, Montgomery has experienced a shift from homeownership to renting over the past decade, accompanied by significant increases in both home prices and rent. The inverse relationship between homeownership rates and average home prices, as well as the impact of rising interest rates, highlights the complex dynamics of the local housing market. As the city moves forward, these trends will likely continue to shape its residential landscape and affect housing affordability for its residents.
