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Rising Home Values and Declining Ownership in West Reading, PA: A Decade of Housing Trends
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
West Reading, Pennsylvania, is a small but vibrant community located in Berks County. With a population of 4,533 as of 2022 and covering just 0.59 square miles, this densely populated borough has experienced significant changes in its housing landscape over the past decade. The city has seen a shift from predominantly owner-occupied housing to a more balanced mix of owners and renters, while average home prices and rent have generally trended upward.
The homeownership rate in West Reading has declined steadily over the years, dropping from 60% in 2013 to 48% in 2022. This shift coincides with a substantial increase in average home prices, which rose from $103,481 in 2013 to $192,300 in 2022, representing an 85.8% increase. The inverse relationship between homeownership rates and average home prices suggests that rising property values may have made homeownership less attainable for some residents.
Federal interest rates have played a role in shaping homeownership trends in West Reading. The period from 2013 to 2016 saw historically low interest rates, hovering around 0.1% to 0.4%. During this time, homeownership rates remained relatively stable at around 57-60%. However, as interest rates began to rise from 2017 onwards, reaching 1.68% by 2022, homeownership rates declined more rapidly, falling to 48% by 2022. This trend aligns with the general principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
As homeownership rates declined, the percentage of renters in West Reading increased from 40% in 2013 to 52% in 2022. This shift was accompanied by a rise in average rent prices, which increased from $833 in 2013 to $903 in 2022, a 8.4% increase. The growing renter population and rising rent prices suggest an increased demand for rental properties in the area, possibly driven by those priced out of the homeownership market.
In 2023 and 2024, West Reading continued to experience growth in average home prices, reaching $207,464 in 2023 and $221,421 in 2024. This represents a further 15.1% increase from 2022 to 2024. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, potentially impacting homebuying decisions in the borough.
Looking ahead, predictive models suggest that average home prices in West Reading may continue to rise over the next five years, potentially reaching around $250,000 by 2029 if current trends persist. Average rent prices are also expected to increase, potentially surpassing $1,000 per month within the same timeframe. However, these projections are subject to various economic factors and local market conditions.
In summary, West Reading has experienced a notable shift in its housing landscape, with declining homeownership rates and rising property values. The interplay between federal interest rates, average home prices, and rental market dynamics has reshaped the community's housing profile. As the borough continues to evolve, balancing affordability with growth will likely be a key challenge for local policymakers and residents alike.
