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Savage, Minnesota: Rising Home Values and Stable Ownership in a Growing Suburb
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
Savage, Minnesota, a suburban city in Scott County within the Minneapolis-Saint Paul metropolitan area, has experienced significant growth and development over the past decade. The population has increased from 26,602 in 2010 to 32,441 in 2022, reflecting the city's appeal as a residential destination. Savage is known for its combination of natural beauty, including the Minnesota River and Murphy-Hanrehan Park Reserve, and modern amenities, making it attractive to families and professionals alike.
Homeownership in Savage has remained remarkably stable despite substantial increases in property values. The ownership rate has only slightly decreased from 87% in 2013 to 86% in 2022, indicating the city's strong suburban character and family-oriented community. Concurrently, average home prices have shown a significant upward trend, rising from $237,422 in 2010 to $423,871 in 2022, representing a 78.5% increase over 12 years.
The relationship between homeownership rates and average home prices in Savage presents an interesting dynamic. Despite the considerable increase in home values, the ownership rate has only marginally decreased. This resilience in homeownership could be attributed to the city's robust local economy and the desirability of the area. For example, while average home prices increased from $324,883 in 2019 to $385,501 in 2021, an 18.7% rise in just two years, the ownership rate remained steady at 84%.
Federal interest rates have played a crucial role in shaping homeownership trends in Savage. The period from 2010 to 2021 saw historically low interest rates, ranging from 0.08% to 2.16%. These low rates likely contributed to maintaining high homeownership levels despite rising home prices. For instance, in 2020, when the federal interest rate dropped to 0.38% from 2.16% in 2019, Savage's homeownership rate remained stable at 84%, even as average home prices increased from $324,883 to $344,412.
Renter percentages in Savage have shown a gradual increase, rising from 11% in 2013 to 14% in 2022. This trend coincides with an overall increase in average rent prices, which grew from $1,348 in 2013 to $1,622 in 2022, a 20.3% increase. The rising renter population could be attributed to the growing workforce attracted to the area's economic opportunities, as well as those priced out of homeownership due to increasing home values.
In 2023 and 2024, Savage's housing market showed signs of stabilization. The average home price in 2023 was $421,789, a slight decrease from 2022, while 2024 saw a modest increase to $424,799. This trend occurred despite rising federal interest rates, which reached 5.02% in 2023 and 5.33% in 2024. These higher rates may have contributed to the moderation in home price growth, potentially making homeownership more challenging for some buyers.
Looking ahead, predictive models suggest that average home prices in Savage may continue to rise, but at a more moderate pace. Over the next five years, average home prices could potentially reach around $450,000 to $475,000, assuming steady economic growth and barring any major market disruptions. Average rent prices are also expected to increase, potentially reaching $1,800 to $1,900 per month within the same timeframe, driven by ongoing demand for rental properties and overall cost of living increases.
In summary, Savage, Minnesota has maintained a strong homeownership rate despite significant increases in average home prices over the past decade. The interplay between federal interest rates, home values, and rental market dynamics has shaped a resilient housing market. While homeownership remains predominant, a gradual shift towards renting is evident, reflecting changing demographics and economic factors. As Savage continues to grow, balancing housing affordability with sustained community development will be crucial for its future prosperity.
