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Zip Code 21701: Rising Home Values and Ownership Rates in Frederick, Maryland
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
Frederick, Maryland, zip code 21701, is a growing urban area that has experienced significant changes in its housing market over the past decade. This analysis examines the trends in homeownership rates, average home prices, and average rent prices, revealing interesting patterns in the local real estate landscape.
The homeownership rate in zip code 21701 has shown a gradual increase from 2013 to 2022. In 2013, the homeownership rate was 64%, and it rose to 67% by 2022. This upward trend coincides with a substantial increase in average home prices. In 2013, the average home price was $256,519, and by 2022, it had risen to $405,415, representing a 58% increase over nine years. The most significant jump occurred between 2020 and 2022, with average home prices rising from $322,190 to $405,415, a 25.8% increase in just two years.
Federal interest rates have played a role in shaping homeownership trends in zip code 21701. From 2013 to 2016, interest rates remained low, ranging from 0.11% to 0.4%, which likely contributed to the steady increase in homeownership rates during this period. As interest rates began to rise more significantly from 2017 to 2019 (1% to 2.16%), homeownership rates continued to climb, suggesting other factors such as local economic conditions and housing demand were influential. The sharp drop in interest rates in 2020 and 2021 (0.38% and 0.08% respectively) coincided with a slight decrease in homeownership rates from 67% to 66%, possibly due to economic uncertainty during the COVID-19 pandemic.
The rental market in zip code 21701 has shown interesting trends as well. The percentage of renters decreased from 36% in 2013 to 33% in 2022. Despite this decrease, average rent prices have generally increased. In 2013, the average rent was $1,445, and by 2022, it had risen to $1,591, an increase of 10.1% over nine years. The highest average rent was recorded in 2021 at $1,670, before slightly decreasing in 2022. These trends suggest that while the proportion of renters has decreased, demand for rental properties remains strong, supporting higher rent prices.
In 2023 and 2024, the housing market in zip code 21701 continued to evolve. The average home price in 2023 was $422,209, representing a 4.1% increase from 2022. In 2024, the average home price further increased to $438,901, a 4% rise from 2023. This continued appreciation occurred despite the Federal interest rate rising to 5.02% in 2023 and 5.33% in 2024, indicating strong local demand for housing.
Looking ahead, predictive models suggest that average home prices in zip code 21701 will continue to rise over the next five years, albeit at a potentially slower rate due to higher interest rates. Average home prices could reach approximately $500,000 by 2029. Average rent prices are also expected to increase, potentially reaching around $1,800 per month by 2029, driven by ongoing population growth and housing demand in the area.
In summary, zip code 21701 has experienced a steady increase in homeownership rates and significant growth in average home prices over the past decade. Despite fluctuations in federal interest rates, the local housing market has remained robust. The rental market, while shrinking in proportion, has seen increases in average rent prices, reflecting the area's overall housing demand. These trends, combined with continued population growth, suggest a dynamic and competitive real estate market in Frederick for the foreseeable future.
