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Rising Home Values and Ownership: Cambridge's Housing Market Evolution
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Cambridge, Minnesota, is a growing community that has experienced notable changes in its housing market over the past decade. With a population of 12,501 in 2022, this city has seen a steady increase in homeownership rates, accompanied by rising average home prices and rent costs. The city's housing landscape reflects a trend towards increased property ownership, with the percentage of owner-occupied homes reaching 74% by 2022.
The relationship between homeownership rates and average home prices in Cambridge shows a positive correlation. In 2013, when the homeownership rate was 69%, the average home price was $140,503. As homeownership increased to 74% by 2022, average home prices rose significantly to $308,596. This represents a 119.6% increase in average home values over nine years, while the homeownership rate increased by 5 percentage points. The most substantial jump in average home prices occurred between 2020 and 2021, with a 15.3% increase from $242,228 to $279,400.
Federal interest rates have played a role in shaping homeownership trends in Cambridge. The period from 2013 to 2020 saw historically low interest rates, ranging from 0.09% to 0.38%. This coincided with the increase in homeownership rates from 69% to 74%. Lower interest rates typically make mortgages more affordable, encouraging home buying. The slight dip in homeownership to 71% in 2016 and 2017 may be attributed to the gradual increase in interest rates during those years, from 0.4% in 2016 to 1% in 2017.
Renter percentages in Cambridge have generally decreased as average rent prices increased. In 2013, 30% of the population were renters, with an average rent of $917. By 2022, the renter percentage decreased to 26%, while the average rent rose to $1,195, a 30.3% increase. The most significant jump in average rent occurred between 2020 and 2021, increasing from $1,012 to $1,110, a 9.7% rise in a single year. This trend suggests that as renting became more expensive, more residents may have transitioned to homeownership.
In 2023 and 2024, Cambridge's housing market continued to evolve. The average home price in 2023 was $310,776, a slight increase from 2022. In 2024, it further rose to $316,563. Interestingly, federal interest rates also increased significantly during this period, reaching 5.02% in 2023 and 5.33% in 2024. Despite these higher interest rates, home prices continued to appreciate, albeit at a slower pace compared to previous years.
Looking ahead, based on the historical data and current trends, we can project that average home prices in Cambridge may continue to rise over the next five years, but potentially at a more moderate rate. The average home price could potentially reach around $350,000 by 2029. Average rent prices are also likely to increase, possibly reaching approximately $1,400 per month in the same timeframe. However, the rate of increase for both metrics may slow down compared to the rapid growth seen in recent years.
In summary, Cambridge has experienced a notable shift towards homeownership, with a concurrent rise in both average home prices and rent costs. The low interest rate environment of the past decade has played a significant role in driving homeownership rates up to 74%. Despite recent increases in interest rates, home prices have continued to appreciate, reflecting the strong demand for housing in the area. As the city continues to grow, balancing affordability with housing demand will likely be a key challenge for local policymakers and residents alike.
