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Rolla, Missouri: Home Values Soar as University Town Maintains Ownership Balance
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
Rolla, Missouri, is a vibrant city located in Phelps County, known for being home to the Missouri University of Science and Technology. This educational hub has significantly influenced the city's demographics and housing market. Over the past decade, Rolla has experienced fluctuations in homeownership rates and housing prices, reflecting broader economic trends and local market dynamics.
The homeownership rate in Rolla has remained relatively stable, with a slight increase from 52% in 2013 to 53% in 2022. This stability in homeownership coincides with a significant rise in average home prices. In 2016, the average home price in Rolla was $130,811. By 2022, this figure had jumped to $199,042, representing a substantial 52.2% increase over six years. This upward trend in home prices, despite relatively stable homeownership rates, suggests a growing demand for housing in the area, possibly driven by the city's educational institutions and economic opportunities.
Federal interest rates have played a crucial role in shaping homeownership trends in Rolla. The period from 2013 to 2016 saw historically low interest rates, hovering around 0.1% to 0.4%. This favorable borrowing environment likely contributed to the stability in homeownership rates during this time. As interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), we see a corresponding stability in homeownership rates, which remained at 53% during this period. The sudden drop in interest rates in 2020 and 2021 (to 0.38% and 0.08% respectively) may have helped maintain the homeownership rate at 53-54% despite rising home prices.
Renting trends in Rolla have shown an inverse relationship to homeownership rates, as expected. The percentage of renters decreased slightly from 48% in 2013 to 47% in 2022. Interestingly, average rent prices have fluctuated over this period. In 2013, the average rent was $771, which decreased to $729 in 2015 before rising again to $756 in 2016. By 2022, the average rent had settled at $726, showing a slight overall decrease from 2013 levels. This trend suggests that while home prices have increased significantly, the rental market has remained relatively affordable, possibly due to increased housing supply or economic factors specific to Rolla.
Looking at the most recent data, the average home price in Rolla reached $203,210 in 2023 and further increased to $208,831 in 2024. This continued upward trend in home prices occurs against a backdrop of significantly higher interest rates, which stood at 5.02% in 2023 and 5.33% in 2024. These higher interest rates might pose challenges for potential homebuyers, potentially impacting future homeownership rates.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in Rolla will continue to rise, albeit at a potentially slower rate due to higher interest rates. We project that by 2029, average home prices could reach approximately $240,000 to $250,000, assuming a moderate annual growth rate of 3-4%. For rent prices, we expect a gradual increase, potentially reaching an average of $800-$850 per month by 2029, reflecting both inflation and increased demand for rental properties as higher home prices and interest rates may deter some from purchasing homes.
In summary, Rolla's housing market has shown resilience and growth over the past decade. The city has maintained a stable balance between homeowners and renters, even as home prices have significantly increased. The influence of federal interest rates on homeownership trends is evident, with recent rises potentially shaping future market dynamics. As Rolla continues to grow, likely driven by its educational institutions and economic development, we expect to see continued upward pressure on both home prices and rents, with the rental market potentially seeing increased demand if homeownership becomes less accessible due to rising prices and interest rates.
