Loading Content...
Zip Code 35224: Birmingham's Shifting Housing Market Amidst Rising Home Values
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Zip code 35224 in Birmingham, Alabama, offers an intriguing snapshot of urban housing dynamics. This area has experienced notable fluctuations in homeownership rates and property values over the past decade. The ownership percentage has shown a slight downward trend, while average home prices have demonstrated significant growth, particularly in recent years. Average rent prices have also increased, albeit with some volatility.
The homeownership rate in zip code 35224 has experienced a gradual decline from 63% in 2016 to 58% in 2022. This shift coincides with a substantial increase in average home prices, which rose from $33,980 in 2016 to $72,788 in 2022, marking a remarkable 114% increase. This inverse relationship suggests that rising home prices may have made homeownership less accessible for some residents. Interestingly, the most dramatic surge in home prices occurred between 2020 and 2022, with values jumping by 55.5% from $46,823 to $72,788.
Federal interest rates have played a significant role in shaping homeownership trends. The period from 2010 to 2021 was characterized by historically low interest rates, ranging from 0.08% to 0.18%. These low rates typically encourage homeownership by making mortgages more affordable. However, in zip code 35224, we observe a counterintuitive trend where homeownership rates decreased despite favorable borrowing conditions. This suggests that other local factors, such as income levels or housing supply, may have had a stronger influence on homeownership rates than interest rates alone.
The renter population in zip code 35224 has grown from 37% in 2016 to 42% in 2022, mirroring the decline in homeownership. Average rent prices have shown an overall upward trend, rising from $803 in 2016 to $852 in 2022, with some fluctuations in between. The peak average rent of $972 was recorded in 2021, coinciding with a population increase to 6,391 residents. This surge in population and rent prices may indicate a temporary spike in housing demand, possibly driven by local economic factors or migration patterns.
In 2023 and 2024, the housing market in zip code 35224 has shown signs of stabilization. The average home price decreased to $64,910 in 2023 and further to $63,491 in 2024, representing a 12.8% decline from the 2022 peak. This cooling of the market coincides with a significant rise in federal interest rates, which reached 5.02% in 2023 and 5.33% in 2024. These higher interest rates likely contributed to the moderation in home prices by reducing affordability and cooling demand.
Looking ahead to the next five years, predictive models suggest a potential stabilization or modest growth in both home prices and rents. Average home prices may experience a gradual increase, potentially reaching around $70,000 by 2029. Rent prices are expected to continue their upward trajectory, possibly reaching an average of $950-$1,000 per month. However, these projections are subject to various economic factors and local market conditions.
In summary, zip code 35224 has witnessed a shift towards renting, with homeownership rates declining as property values increased significantly. The recent cooling of home prices, coupled with rising interest rates, indicates a market adjustment. The area's housing market appears to be entering a phase of more moderate growth, with a continued trend towards renting likely to persist in the near future.
