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Tucson's Rising Home Values and Ownership Rates: A Decade of Growth in the Desert
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
Tucson, Arizona, the second-largest city in the state, is known for its rich cultural heritage, stunning desert landscapes, and the University of Arizona. Over the past decade, Tucson has experienced significant changes in homeownership rates, average home prices, and average rent prices. The city has seen a gradual increase in homeownership, rising average home prices, and steadily climbing average rent prices.
The trend between homeownership percentage and average home prices in Tucson shows an interesting correlation. In 2013, the homeownership rate was 47%, with an average home price of $149,150. As average home prices increased, so did the homeownership rate. By 2022, the homeownership rate had risen to 52%, while the average home price reached $323,203. This represents a 117% increase in average home prices over the decade, accompanied by a 5 percentage point increase in homeownership.
Federal interest rates have played a crucial role in shaping homeownership trends in Tucson. From 2013 to 2016, when interest rates were extremely low (ranging from 0.11% to 0.4%), homeownership rates remained stable at 47%. As interest rates began to rise in 2017 (1%), homeownership also increased, reaching 51% by 2017. This trend continued through 2022, with homeownership peaking at 52% despite rising interest rates, suggesting other factors were influencing buyers' decisions.
Renter percentages and average rent prices in Tucson have shown their own distinct patterns. In 2013, 53% of the population were renters, with an average rent of $745. As the population grew from 526,141 in 2013 to 546,598 in 2022, the percentage of renters decreased to 48%. However, average rent prices increased significantly during this period, reaching $1,051 in 2022 - a 41% increase over the decade. This suggests that while fewer people were renting, those who did were paying substantially more.
In 2023 and 2024, Tucson's housing market continued to evolve. The average home price in 2023 was $323,245, showing a slight increase from 2022. In 2024, the average home price rose further to $331,483. Interestingly, federal interest rates also increased significantly during this period, reaching 5.02% in 2023 and 5.33% in 2024. Despite these high interest rates, home prices continued to rise, indicating strong demand in the Tucson housing market.
Looking ahead, predictive models suggest that average home prices in Tucson will continue to rise over the next five years, albeit at a more moderate pace. Based on historical trends, average home prices could potentially reach around $375,000 to $400,000 by 2029. Average rent prices are also expected to increase, potentially reaching $1,200 to $1,300 per month in the same timeframe.
In summary, Tucson has experienced a notable shift towards homeownership over the past decade, despite significant increases in both home prices and interest rates. The rental market has seen a decrease in the percentage of renters, but a substantial increase in average rent prices. These trends reflect a dynamic housing market in Tucson, influenced by population growth, economic factors, and changing preferences among residents. The city's continued growth and development suggest that these trends may persist in the coming years, with both homeowners and renters facing higher costs in the housing market.
