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Zip Code 35603: Rising Home Values and Ownership Trends in Decatur, Alabama
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 35603, located in Decatur, Alabama, has experienced notable shifts in homeownership rates and housing prices over the past decade. This area has seen a general trend of increasing homeownership and rising average home prices, while average rent prices have fluctuated.
The homeownership rate in zip code 35603 has shown a gradual increase from 68% in 2013 to 72% in 2022. This upward trend in homeownership coincides with a significant rise in average home prices. In 2013, the average home price was $159,390, which steadily increased to $263,783 by 2022, representing a 65.5% increase over this period. The most substantial year-over-year increase occurred between 2020 and 2021, with average home prices jumping from $203,445 to $235,137, a 15.6% increase in a single year.
Federal interest rates have played a crucial role in shaping homeownership trends in this area. The period from 2013 to 2022 was characterized by historically low interest rates, ranging from 0.11% in 2013 to 1.68% in 2022. These low rates likely contributed to the increased homeownership rates by making mortgages more affordable for potential buyers. The steepest increase in homeownership, from 70% in 2020 to 72% in 2021, coincided with interest rates dropping to a mere 0.08% in 2021, the lowest in the observed period.
Conversely, the percentage of renters in zip code 35603 has decreased from 32% in 2017 to 28% in 2022. Despite this decline in the renter population, average rent prices have shown an overall upward trend. In 2013, the average rent was $716, which increased to $887 by 2022, representing a 23.9% increase. However, rent prices have not followed a straight line, with fluctuations observed throughout the years. For instance, average rent peaked at $979 in 2019 before declining to $896 in 2020, possibly influenced by the economic impacts of the COVID-19 pandemic.
In 2023 and 2024, the housing market in zip code 35603 continued to evolve. The average home price reached $271,361 in 2023 and further increased to $275,705 in 2024, showing a continued upward trend. However, this growth has slowed compared to previous years, possibly due to the sharp increase in federal interest rates, which rose to 5.02% in 2023 and 5.33% in 2024.
Looking ahead, based on the observed trends and current market conditions, we can expect average home prices in zip code 35603 to continue rising, albeit at a slower pace due to higher interest rates. Average rent prices are likely to follow suit, potentially increasing as more people may opt to rent due to higher mortgage costs. Over the next five years, average home prices could potentially reach around $300,000, while average rent prices might approach $1,100 per month.
In summary, zip code 35603 has experienced a steady increase in homeownership rates and average home prices over the past decade, influenced by historically low interest rates. The recent sharp increase in interest rates may slow down this growth but is unlikely to reverse the trend entirely. The rental market, while smaller, has seen overall increases in average rent prices despite fluctuations. These trends reflect a dynamic housing market in Decatur, Alabama, that continues to evolve in response to economic conditions and demographic changes.
