Loading Content...
Rising Home Values and Declining Ownership in Newark's Zip Code 07108: 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
Zip code 07108, located in Newark, New Jersey, has experienced significant changes in its housing market over the past decade. This urban area has seen notable shifts in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local dynamics.
The homeownership rate in zip code 07108 has shown a gradual decline from 20% in 2013 to 16% in 2022. This downward trend in homeownership coincides with a substantial increase in average home prices. In 2013, the average home price was $149,817, but by 2022, it had risen dramatically to $407,653, representing a 172% increase over this period. This inverse relationship suggests that rising home prices may have made homeownership less accessible for many residents in the area.
Federal interest rates have played a significant role in shaping homeownership trends. From 2013 to 2016, when interest rates were historically low (ranging from 0.11% to 0.40%), the homeownership rate remained relatively stable at around 18-20%. However, as interest rates began to rise more substantially from 2017 (1%) to 2019 (2.16%), the homeownership rate declined to 16%. This trend aligns with the general principle that lower interest rates tend to encourage homeownership by making mortgages more affordable.
The renter population in zip code 07108 has grown from 80% in 2013 to 84% in 2022. This increase in renters corresponds with fluctuations in average rent prices. In 2013, the average rent was $1,013, which increased to $1,081 by 2015. However, rent prices have shown some volatility, dropping to $960 in 2020 before rising again to $970 in 2022. The population in the zip code has also grown from 23,973 in 2013 to 27,849 in 2022, potentially contributing to the increased demand for rental properties.
Looking at the most recent data, the average home price in zip code 07108 reached $431,659 in 2023 and further increased to $453,276 in 2024. This continued upward trend in home prices occurs alongside a significant rise in interest rates, which stood at 5.02% in 2023 and 5.33% in 2024. These higher interest rates may further impact homeownership rates in the area.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 07108 will continue to rise, potentially reaching around $550,000 by 2029. This projection is based on the consistent upward trend observed over the past decade. For rent prices, the forecast suggests a more moderate increase, potentially reaching an average of about $1,200 per month by 2029, considering the historical fluctuations and recent trends.
In summary, zip code 07108 has experienced a significant decrease in homeownership rates coupled with a substantial increase in average home prices over the past decade. The renter population has grown, while average rent prices have shown some volatility. The recent sharp increase in interest rates, combined with rising home prices, may further challenge homeownership accessibility in the area. These trends suggest a continued shift towards a rental-dominated market in this Newark neighborhood for the foreseeable future.
