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Zip Code 18103: Rising Home Values and Shifting Ownership Patterns in Allentown, PA
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 18103, located in Allentown, Pennsylvania, has experienced significant shifts in homeownership rates, average home prices, and average rent prices over the past decade. This area has seen a gradual decrease in homeownership coupled with rising property values and rental costs. The homeownership rate in zip code 18103 has steadily declined from 66% in 2013 to 59% in 2022. Concurrently, average home prices have shown a substantial increase. In 2013, the average home price was $139,536, which rose to $251,314 by 2022, representing an impressive 80% increase over nine years. This inverse relationship suggests that as home prices climbed, fewer residents were able to afford homeownership, leading to a shift towards renting.
Federal interest rates have played a role in homeownership trends. From 2013 to 2016, when interest rates were extremely low (ranging from 0.11% to 0.40%), homeownership rates remained relatively stable at around 64-66%. However, as interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, homeownership rates declined more rapidly, dropping to 59% by 2022. This trend aligns with the general principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
As homeownership decreased, the percentage of renters in zip code 18103 increased from 34% in 2013 to 41% in 2022. This shift coincided with a rise in average rent prices. In 2013, the average rent was $1,074, which increased to $1,180 by 2022, a 9.9% increase. The population in this zip code remained relatively stable during this period, fluctuating between 45,000 and 48,000 residents. The combination of rising home prices and increasing rental rates suggests a growing demand for housing in the area, which has benefited property owners but potentially strained affordability for residents.
In 2023 and 2024, the housing market in zip code 18103 continued its upward trajectory. The average home price reached $267,015 in 2023 and further increased to $280,597 in 2024, representing a 6.3% and 5.1% year-over-year growth, respectively. This growth occurred despite significantly higher federal interest rates, which stood at 5.02% in 2023 and 5.33% in 2024, potentially indicating strong underlying demand in the local real estate market.
Looking ahead, based on historical trends and current market conditions, we can project continued growth in both average home prices and rent prices over the next five years. Average home prices could potentially reach around $350,000 by 2029, assuming a conservative annual growth rate of 4-5%. Similarly, average rent prices might increase to approximately $1,400-$1,500 per month, factoring in a 3-4% annual increase.
In summary, zip code 18103 has experienced a notable shift from homeownership to renting, driven by rapidly appreciating home values and rising interest rates. The area has seen substantial growth in property values, with average home prices nearly doubling over a decade. Despite higher interest rates in recent years, the housing market has remained robust, suggesting strong local demand. These trends point towards a continuing competitive housing market in this Allentown neighborhood, with both homeowners and investors potentially benefiting from appreciating property values, while renters may face ongoing affordability challenges.
