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Zip Code 38115: Memphis Neighborhood Sees Surge in Home Values Amid Shift to Renting
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 38115, located in Memphis, Tennessee, has experienced significant shifts in its housing market over the past decade. This area has seen notable changes in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local market dynamics.
The ownership percentage in zip code 38115 has shown a declining trend from 2013 to 2022. In 2013, 31% of housing units were owner-occupied, but by 2022, this figure had decreased to 24%. This decline in homeownership coincided with a substantial increase in average home prices. In 2013, the average home price was $59,628, which rose dramatically to $173,690 by 2022, representing a 191% increase over this period.
The relationship between federal interest rates and homeownership rates in this zip code appears to follow the general economic principle that lower interest rates tend to encourage homeownership. For instance, when interest rates were at historic lows between 2013 and 2016 (ranging from 0.11% to 0.40%), the homeownership rate remained relatively stable around 25-31%. However, as interest rates began to rise more significantly from 2017 onwards, reaching 1.68% in 2022, the homeownership rate declined to its lowest point of 23% in 2018 and 2019.
Conversely, the percentage of renters in zip code 38115 has increased from 69% in 2013 to 76% in 2022. This rise in renters corresponds with an overall increase in average rent prices, albeit with some fluctuations. The average rent price rose from $997 in 2013 to $983 in 2022, peaking at $1,040 in 2021. It's worth noting that despite the increase in the renter population, the overall population of the zip code decreased from 41,581 in 2013 to 36,780 in 2022, which may have influenced rental market dynamics.
Looking at the most recent data, the average home price in zip code 38115 slightly decreased from $173,690 in 2022 to $173,552 in 2023, and further declined to $167,747 in 2024. This recent dip in home prices coincides with a significant increase in federal interest rates, which rose from 1.68% in 2022 to 5.02% in 2023, and further to 5.33% in 2024. These higher interest rates may be contributing to a cooling effect on the housing market in this area.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 38115 may continue to experience moderate growth, albeit at a slower pace than the rapid increases seen in the past decade. This projection is based on the historical trend of rising home values in the area, tempered by the recent cooling observed in 2023 and 2024. Average rent prices are expected to maintain a steady upward trajectory, driven by the increasing proportion of renters in the area and the overall trend of rising rental costs observed in recent years.
In summary, zip code 38115 has undergone significant changes in its housing market. The area has seen a shift towards a renter-majority population, with homeownership rates declining as average home prices substantially increased. The rental market has grown, with average rent prices showing an overall upward trend despite some fluctuations. Recent data indicates a potential cooling in the housing market, likely influenced by rising interest rates. These trends suggest a dynamic and evolving housing landscape in this Memphis zip code, with implications for both current and future residents.
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