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Rising Home Values and Ownership in Arrowsmith: 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
Arrowsmith, located in Illinois, is a small community that has experienced notable shifts in its housing landscape over the past decade. The village has seen fluctuations in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local market dynamics.
The homeownership rate in Arrowsmith has shown an overall increasing trend from 2013 to 2022. In 2013, the homeownership rate was 83%, which rose to 86% by 2022. This upward trend coincided with a general increase in average home prices. In 2013, the average home price was $122,655, which steadily climbed to $153,130 by 2022, representing a 24.8% increase over this period. This correlation suggests that rising property values may have incentivized homeownership, as residents potentially viewed real estate as a sound investment.
Federal interest rates have played a significant role in shaping homeownership trends. From 2013 to 2020, interest rates remained relatively low, ranging from 0.09% to 2.16%. This period of low interest rates corresponded with the increase in homeownership rates from 83% in 2013 to 89% in 2020. Lower interest rates typically make mortgages more affordable, encouraging more people to become homeowners. However, as interest rates began to rise more sharply in 2022 to 1.68%, we saw a slight decrease in homeownership to 86%, indicating the potential impact of higher borrowing costs on homebuying decisions.
Renter percentages in Arrowsmith have generally decreased as homeownership rates increased. In 2013, 16% of residents were renters, which declined to 14% by 2022. Interestingly, despite this decrease in the renter population, average rent prices have shown a consistent upward trend. The average rent price rose from $683 in 2013 to $1,043 in 2022, a substantial 52.7% increase. This trend suggests that even as fewer residents opt for renting, the rental market has become more expensive, possibly due to limited rental supply or improvements in rental property quality.
In 2023 and 2024, Arrowsmith continued to see growth in average home prices. The average home price reached $158,601 in 2023 and further increased to $169,370 in 2024, representing a 6.8% year-over-year increase. This growth occurred despite the federal interest rate rising to 5.02% in 2023 and 5.33% in 2024, indicating a robust local housing market that has maintained momentum even in a higher interest rate environment.
Looking ahead, based on the observed trends, we can forecast continued growth in both average home prices and rent prices over the next five years. Average home prices could potentially reach around $190,000 by 2029, assuming a similar growth rate to recent years. Average rent prices might approach $1,300 per month in the same timeframe if the current trajectory persists. However, these projections could be influenced by various factors, including economic conditions, local development, and broader housing market trends.
In summary, Arrowsmith has experienced a general trend of increasing homeownership rates and rising property values over the past decade. The interplay between federal interest rates, homeownership rates, and property prices has been evident, with low interest rates corresponding to higher homeownership. Despite a decreasing renter population, rent prices have risen significantly, pointing to a complex rental market dynamic. The village's housing market has shown resilience in the face of rising interest rates, with continued growth in home values through 2024.
