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Rising Home Values and Ownership Trends in Erie's Zip Code 16506: A Decade of Growth
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
Zip code 16506, located in Erie, Pennsylvania, has experienced notable shifts in homeownership rates and housing prices over the past decade. This area, known for its proximity to Lake Erie, has seen a dynamic real estate market with fluctuating trends in ownership and rental patterns.
The homeownership rate in zip code 16506 has shown resilience, with some fluctuations over the years. In 2013, the area had a high homeownership rate of 74%. This rate decreased to 68% by 2016 and remained stable until 2018. Interestingly, there was a slight uptick in homeownership, reaching 72% by 2022. Concurrently, average home prices in the area have shown a steady upward trend. In 2013, the average home price was $164,563, which increased to $228,196 by 2022, representing a substantial 38.7% increase over this period.
The relationship between federal interest rates and homeownership rates in this zip code follows a general trend observed nationwide. Lower interest rates tend to encourage homeownership due to more affordable financing options. For instance, when interest rates were at historic lows between 2020 and 2021 (0.38% and 0.08% respectively), the homeownership rate in the area increased from 71% to 72%. This aligns with the general principle that lower interest rates can stimulate home buying activity.
Regarding rental trends, the percentage of renters in zip code 16506 has fluctuated inversely to homeownership rates. The renter population peaked at 32% in 2016 and 2017, coinciding with the lowest homeownership rates during this period. Average rent prices have shown an overall upward trend, albeit with some fluctuations. In 2013, the average rent was $1,071, which increased to $1,145 by 2022, representing a 6.9% increase. It's worth noting that despite the population growth from 23,528 in 2013 to 24,135 in 2022, the rental market has remained relatively stable in terms of occupancy percentages.
Looking at the most recent data, the average home price in zip code 16506 reached $243,165 in 2023 and further increased to $254,918 in 2024. This represents a significant jump of 11.7% from 2022 to 2024. Concurrently, federal interest rates rose sharply to 5.02% in 2023 and 5.33% in 2024, potentially impacting homebuying decisions in the area.
Applying predictive models to forecast 5-year trends, we anticipate continued growth in average home prices, albeit at a potentially slower rate due to higher interest rates. Average rent prices are also expected to increase, driven by population growth and potential shifts towards renting if higher interest rates persist, making homeownership less accessible for some.
In summary, zip code 16506 has demonstrated a robust housing market with resilient homeownership rates and steadily increasing home values. The area has weathered fluctuations in the rental market while maintaining a relatively stable balance between owners and renters. The recent sharp increase in home prices and interest rates suggests a dynamic period ahead for the local real estate market, with potential impacts on both homeownership and rental trends.
