Renter percentages in Salem have inversely mirrored the homeownership trends. The renter-occupied rate peaked at 23% in 2016 and 2018, coinciding with lower homeownership rates. As homeownership increased, the renter percentage decreased to 8% by 2022. Average rent prices have shown volatility, rising from $629 in 2013 to a peak of $927 in 2019, before declining to $732 in 2022. This decline in rent prices, coupled with the increase in homeownership, suggests a shift in the local housing market dynamics.

Looking at the most recent data, the average home price in Salem continued its upward trajectory, reaching $201,344 in 2023 and further increasing to $207,274 in 2024. This represents a 4.7% increase from 2022 to 2024. Concurrently, federal interest rates have risen significantly, reaching 5.33% in 2024, which could potentially slow down the pace of home price appreciation and impact affordability for potential buyers.

Applying predictive models to forecast 5-year trends, we anticipate that average home prices in Salem will continue to rise, albeit at a more moderate pace due to higher interest rates. We project average home prices could reach approximately $225,000 to $230,000 by 2029. For rent prices, we expect a gradual increase, potentially reaching an average of $800 to $850 per month by 2029, assuming economic conditions remain stable and population growth continues.

In summary, Salem has experienced a significant increase in homeownership rates, reaching 92% in 2022, while average home prices have shown steady growth. The rental market has contracted, with both the percentage of renters and average rent prices decreasing in recent years. The interplay between rising home prices and increased interest rates will likely be a key factor shaping the housing market in Salem over the next five years, potentially moderating price growth and affecting affordability for both buyers and renters.