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Zip Code 07501: Rising Home Values and Low Ownership Rates in Paterson, New Jersey
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
Zip code 07501, located in Paterson, New Jersey, is an area known for its rich industrial history and diverse community. This neighborhood has experienced significant changes in its housing market over the past decade, particularly in terms of homeownership rates, average home prices, and average rent prices. These changes reflect broader economic trends and local market dynamics.
The homeownership rate in zip code 07501 has remained relatively low and stable, fluctuating between 16% and 19% from 2013 to 2022. In contrast, average home prices have shown a remarkable upward trend. In 2013, the average home price was $144,737, which increased substantially to $348,431 by 2022, representing a 140.7% growth over this period. This stark contrast between stable homeownership rates and rising home prices suggests that while property values have appreciated significantly, it hasn't translated into increased homeownership opportunities for local residents.
Federal interest rates have played a role in shaping homeownership trends in the area. From 2013 to 2016, when interest rates were at historic lows (ranging from 0.09% to 0.4%), homeownership rates fluctuated between 16% and 18%. As interest rates began to rise from 2017 (1%) to 2019 (2.16%), homeownership rates showed slight variations, reaching a peak of 19% in 2017 before settling back to 16% in 2019. This pattern indicates that while low interest rates may have provided some support for homeownership, other factors such as rapidly increasing home prices likely offset any potential benefits.
Renter occupancy has consistently dominated the housing market in zip code 07501, ranging from 81% to 84% between 2013 and 2022. The average rent prices have shown a general upward trend, albeit with some fluctuations. In 2013, the average rent was $1,117, which increased to $1,249 by 2021, representing an 11.8% increase. However, there was a slight decrease to $1,140 in 2022. The high renter occupancy rate, coupled with rising rent prices, indicates a strong demand for rental properties in the area, possibly driven by the growing population, which increased from 30,719 in 2013 to 35,092 in 2022.
In 2023, the average home price in zip code 07501 reached $361,442, continuing the upward trend from previous years. This increase occurred despite a significant rise in federal interest rates to 5.02% in 2023. Moving into 2024, the average home price has further climbed to $382,379, while the federal interest rate has slightly increased to 5.33%. These figures demonstrate the resilience of the local housing market in the face of higher borrowing costs.
Looking ahead, based on historical trends and current market conditions, we can project that average home prices in zip code 07501 may continue to rise over the next five years, potentially reaching around $450,000 by 2029. However, this growth rate might moderate compared to the rapid increases seen in recent years due to higher interest rates. Average rent prices are also likely to continue their upward trajectory, potentially reaching approximately $1,400 by 2029, assuming steady population growth and continued high demand for rental properties.
In summary, zip code 07501 in Paterson has experienced a significant increase in average home prices over the past decade, with a persistent low homeownership rate and high renter occupancy. The area has shown resilience to rising interest rates, with home prices continuing to appreciate. The rental market remains strong, reflecting the area's growing population and the challenges of transitioning to homeownership in a rapidly appreciating market. These trends suggest a dynamic and evolving housing landscape in this New Jersey neighborhood.
