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Terrace Hills: Rising Home Values and Ownership Rates in Mobile's Dynamic Neighborhood
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
Terrace Hills, a neighborhood in Mobile, Alabama, has witnessed significant changes in its housing market over the past decade. This area has experienced an increase in homeownership rates alongside rising average home prices and fluctuating rent prices. The neighborhood has consistently maintained a higher proportion of owner-occupied housing units, while average home prices have shown a steady upward trend, particularly in recent years.
The homeownership rate in Terrace Hills has shown an overall increasing trend from 2013 to 2022. Starting at 55% in 2013, the rate rose to 65% by 2022, indicating a 10 percentage point increase and suggesting a growing preference for homeownership in the neighborhood. Concurrently, average home prices have demonstrated a consistent upward trajectory. In 2013, the average home price was $112,223, which increased to $185,012 by 2022, representing a substantial 64.9% growth over this period.
The relationship between federal interest rates and homeownership rates in Terrace Hills shows some correlation. During the period of low interest rates from 2013 to 2016, ranging from 0.1% to 0.4%, the homeownership rate increased from 55% to 61%. This trend aligns with the general principle that lower interest rates tend to encourage homeownership due to more affordable financing options. However, even as interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, the homeownership rate in Terrace Hills continued to increase, reaching 65% in 2022. This suggests that other local factors may have also played a role in driving homeownership in the neighborhood.
The rental market in Terrace Hills has shown interesting trends as well. The percentage of renter-occupied units decreased from 45% in 2013 to 35% in 2022, inversely mirroring the rise in homeownership. Average rent prices, however, have shown volatility. In 2013, the average rent was $723, which increased to $1,000 in 2014, before dropping to $716 in 2016. By 2022, the average rent had risen again to $1,035, representing a 43.2% increase from 2013 to 2022. This fluctuation in rent prices, coupled with the decreasing percentage of renters, suggests a complex rental market influenced by various factors including housing availability and local economic conditions.
Looking at the most recent data, in 2023, the average home price in Terrace Hills reached $191,542, showing a continued upward trend. This trend persisted into 2024, with average home prices further increasing to $199,067. Notably, federal interest rates have also risen significantly, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates may potentially impact future homebuying decisions in the neighborhood.
Applying predictive models to forecast 5-year trends, it is anticipated that average home prices in Terrace Hills will continue to rise, albeit potentially at a more moderate pace due to the higher interest rate environment. Average rent prices are also expected to increase, possibly at a rate slightly below that of home prices, as the rental market adjusts to changes in housing demand and overall economic conditions.
In summary, Terrace Hills has experienced a significant shift towards homeownership over the past decade, with a corresponding increase in average home prices. The rental market has seen a decrease in the proportion of renters, while average rent prices have shown volatility but an overall upward trend. Recent data indicates continued growth in home prices, coupled with rising interest rates, which may shape the neighborhood's housing dynamics in the coming years. These trends reflect a changing housing landscape in Terrace Hills, with implications for both current and future residents.
