Loading Content...
Underwood, Iowa: Rising Home Values and Ownership Rates Amid Interest Rate Fluctuations
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Underwood, Iowa, is a small community that has experienced interesting shifts in its housing landscape over the past decade. This city has seen a notable increase in homeownership rates, accompanied by fluctuations in average home prices and rent costs. The trends in ownership percentages, average home prices, and average rent prices reflect the dynamic nature of Underwood's real estate market.
The relationship between homeownership rates and average home prices in Underwood shows a positive correlation. From 2013 to 2022, the percentage of owner-occupied homes increased from 80% to 88%, while average home prices rose from $208,123 to $327,957. This significant 57.6% increase in average home prices coincided with an 8 percentage point rise in homeownership. The most substantial jump in homeownership occurred between 2019 and 2022, rising from 83% to 88%, while average home prices surged by 32% during the same period.
Federal interest rates appear to have influenced homeownership rates in Underwood. As interest rates remained low from 2013 to 2020, ranging between 0.08% and 0.4%, homeownership rates gradually increased. The sharp rise in homeownership from 2019 to 2022 coincided with historically low interest rates, particularly in 2020 and 2021 when rates were 0.38% and 0.08% respectively. This environment of low interest rates likely contributed to more affordable financing options, encouraging homeownership.
Conversely, the percentage of renters in Underwood decreased from 19% in 2013 to 12% in 2022. During this period, average rent prices increased from $644 to $874, a 35.7% rise. Interestingly, despite the overall decline in the renter population, rent prices continued to climb. This trend might be attributed to a combination of factors, including improved housing quality, increased demand for the limited rental properties available, or broader economic conditions affecting the rental market.
In 2023 and 2024, Underwood experienced further increases in average home prices, reaching $342,853 in 2023 and $355,668 in 2024. This represents a 4.5% year-over-year increase from 2022 to 2023, and a 3.7% increase from 2023 to 2024. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, marking a substantial increase from the low rates of previous years.
Looking ahead, predictive models suggest that average home prices in Underwood may continue to rise over the next five years, albeit at a potentially slower pace due to higher interest rates. Average rent prices are also expected to increase, possibly at a rate similar to or slightly below that of home prices. These projections are based on historical trends and current market conditions.
In summary, Underwood has experienced a significant shift towards homeownership, with a corresponding increase in average home prices. The rental market, while shrinking in terms of population, has seen steady increases in average rent prices. The recent rise in interest rates may impact future homeownership trends and price appreciation, potentially leading to a more balanced housing market in the coming years.
