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Rising Home Values and Shifting Ownership in Zip Code 36116: Montgomery's Evolving Housing Market
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Zip code 36116, located in Montgomery, Alabama, has experienced significant demographic and housing market changes over the past decade. This area has seen fluctuations in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local market conditions.
The homeownership rate in zip code 36116 has shown a gradual decline from 2013 to 2022. In 2013, the area had a 52% homeownership rate, which decreased to 47% by 2022. This decline coincides with changes in average home prices. The average home price in 2013 was $88,753, which increased to $129,202 by 2022, representing a 45.6% increase over nine years. This substantial rise in home prices may have contributed to the decrease in homeownership, as higher prices can make purchasing a home less affordable for many residents.
Federal interest rates have played a role in homeownership trends in zip code 36116. The period from 2013 to 2016 saw historically low interest rates, ranging from 0.09% to 0.4%. During this time, homeownership rates remained relatively stable, hovering around 51-52%. However, as interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, homeownership rates declined more noticeably, dropping to 47% by 2022. This trend aligns with the general principle that lower interest rates tend to encourage homeownership due to more affordable financing options.
As homeownership rates declined, the percentage of renters in zip code 36116 increased from 46% in 2013 to 53% in 2022. This shift coincided with fluctuations in average rent prices. The average rent in 2013 was $1,011, which increased to $1,022 by 2014 but then decreased to $987 by 2022. Despite the slight decrease in average rent, the renter population continued to grow, possibly due to the rising home prices making homeownership less attainable for some residents. The population in the zip code also grew from 48,029 in 2013 to 47,146 in 2022, which may have contributed to the increased demand for rental properties.
Looking at the most recent data, the average home price in zip code 36116 reached $135,285 in 2023 and further increased to $135,840 in 2024. This represents a 5.1% increase from 2022 to 2024. Concurrently, federal interest rates rose significantly, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates, combined with rising home prices, may further impact homeownership trends in the area.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 36116 will continue to rise, potentially reaching around $150,000 by 2029. This projection is based on the consistent upward trend observed since 2020. For average rent prices, the forecast suggests a more modest increase, potentially reaching about $1,050 by 2029, assuming the slight fluctuations in recent years stabilize into a gradual upward trend.
In summary, zip code 36116 has experienced a shift towards a higher percentage of renters, driven by rising home prices and fluctuating interest rates. The area has seen significant growth in average home values, particularly since 2020, while average rent prices have remained relatively stable. These trends suggest a changing housing landscape in the zip code, with potential implications for future housing affordability and community demographics.
