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Rising Home Values and Ownership in Advance: A Midwestern Housing Market Evolution
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
Advance, Missouri, is a small urban center with a population that has fluctuated around 2,000 residents over the past decade. This charming Midwestern city has experienced interesting shifts in its housing market, with homeownership rates and housing prices showing notable trends in recent years. The homeownership rate in Advance has demonstrated resilience and growth, increasing from 71% in 2019 to 81% in 2022. This upward trend in homeownership coincides with a significant rise in average home prices. In 2016, the average home price was $83,596, and by 2022, it had surged to $122,749, representing a substantial 46.8% increase over six years. This parallel growth suggests a strong local housing market and increasing property values, potentially driven by factors such as local economic improvements or increased demand for housing in the area.
Federal interest rates have played a crucial role in shaping homeownership trends. The period from 2016 to 2022 saw relatively low interest rates, ranging from 0.4% to 1.68%. These low rates likely contributed to the increased homeownership in Advance, as they made mortgages more affordable and attractive to potential buyers. The jump in homeownership from 76% in 2020 to 81% in 2021 and 2022 aligns with the extremely low federal interest rates of 0.38% in 2020 and 0.08% in 2021, which may have spurred a surge in home purchases.
Conversely, the percentage of renters in Advance has decreased from 29% in 2019 to 19% in 2022. Despite this decline in the renter population, average rent prices have shown an upward trend. The average rent increased from $569 in 2019 to $683 in 2022, a 20% rise over three years. This increase in rent prices, despite a smaller renter population, could indicate a tightening rental market with limited supply or an overall increase in the cost of living in the area.
In 2023 and 2024, the housing market in Advance continued to evolve. The average home price reached $125,899 in 2023 and further increased to $127,334 in 2024, showing a continued upward trajectory. However, this growth has slowed compared to previous years, possibly due to the sharp rise in federal interest rates, which stood at 5.02% in 2023 and 5.33% in 2024. These higher interest rates may be tempering the rapid home price appreciation seen in earlier years.
Looking ahead, predictive models suggest that average home prices in Advance may continue to rise, but at a more moderate pace. Over the next five years, we might expect average home prices to increase by approximately 2-3% annually, reaching around $140,000 by 2029. Rent prices are also projected to continue their upward trend, potentially increasing by 3-4% annually, which could bring the average rent to approximately $800 by 2029.
In summary, Advance has experienced a notable increase in homeownership rates, coupled with significant growth in average home prices. The rental market, while shrinking in terms of population, has seen rising average rents. These trends, influenced by factors such as federal interest rates and local market dynamics, paint a picture of a changing housing landscape in this Missouri city. The recent slowdown in home price appreciation and the impact of higher interest rates will be crucial factors to watch in the coming years.
