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Salem, Missouri: Steady Homeownership Amidst Rising Home Values
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Salem, Missouri, a city known for its rich history and natural beauty, has experienced notable shifts in its housing market over the past decade. The city, with a population of 8,670 in 2022, has seen fluctuations in homeownership rates and significant changes in average home and rent prices.
Homeownership in Salem has shown resilience, with the percentage of owner-occupied homes increasing from 63% in 2015 to 67% in 2022. This trend coincides with a substantial rise in average home prices. In 2016, the average home price in Salem was $95,365, which steadily increased to $160,763 by 2022, representing a remarkable 68.6% increase over six years. This upward trend in home prices, coupled with the increase in homeownership, suggests a growing demand for housing in the area despite rising costs.
The relationship between federal interest rates and homeownership rates in Salem presents an interesting dynamic. From 2016 to 2019, as interest rates rose from 0.4% to 2.16%, Salem's homeownership rate remained stable at 63%. However, when interest rates dropped sharply to 0.38% in 2020, homeownership in Salem increased to 67%, maintaining this level through 2022 despite interest rates climbing back to 1.68%. This pattern suggests that while lower interest rates may have initially encouraged homeownership, other local factors have sustained the higher ownership rate even as interest rates began to rise again.
Rental trends in Salem have shown some fluctuation. The percentage of renter-occupied homes increased from 34% in 2013 to 37% in 2015, remaining steady until 2019 when it decreased back to 34%. By 2022, the renter percentage further declined to 33%. Average rent prices have generally increased over this period, rising from $627 in 2013 to $634 in 2022, with some fluctuations in between. Notably, there was a significant jump in average rent from $658 in 2020 to $698 in 2021, followed by a decrease to $634 in 2022. These changes in rent prices and renter percentages may reflect shifts in local economic conditions and housing preferences.
In 2023 and 2024, Salem's housing market continued its upward trajectory. The average home price reached $169,908 in 2023 and further increased to $173,848 in 2024, representing a 5.7% and 2.3% year-over-year increase, respectively. This growth occurred despite federal interest rates rising to 5.02% in 2023 and 5.33% in 2024, indicating strong local demand for housing that has overcome the potential deterrent of higher borrowing costs.
Looking ahead, based on the observed trends, it's projected that average home prices in Salem will continue to rise over the next five years, potentially reaching around $200,000 by 2029. This forecast assumes a continuation of the steady growth pattern seen in recent years. Average rent prices are also expected to increase, potentially reaching approximately $750 per month by 2029, following the general upward trend with some potential for fluctuations.
In summary, Salem's housing market has demonstrated resilience and growth, with increasing homeownership rates and rising home values despite fluctuating interest rates. The rental market has shown more variability, but with a general trend towards higher rents. These trends suggest a robust local housing market that has shown the ability to withstand broader economic pressures.
