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Zip Code 55123: Rising Home Values and Ownership Rates in Eagan, Minnesota
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 55123, located in Eagan, Minnesota, has experienced significant changes 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, with some fluctuations in the rental market. The homeownership rate in zip code 55123 has shown a steady increase from 77% in 2016 to 82% in 2022. This upward trend coincides with a significant rise in average home prices, which grew from $314,933 in 2016 to $461,729 in 2022, representing a 46.6% increase over six years. The relationship between homeownership rates and average home prices suggests that despite rising costs, more residents in this area are choosing to buy homes rather than rent.
Federal interest rates have played a role in homeownership trends in zip code 55123. The period from 2016 to 2020 saw relatively low interest rates, ranging from 0.4% to 2.16%, which likely contributed to the increase in homeownership from 77% to 80% during this time. The extraordinarily low rate of 0.08% in 2021 corresponded with a further increase in homeownership to 81%, as more favorable financing options became available to potential buyers.
Renter percentages in zip code 55123 have correspondingly decreased from 22% in 2017 to 18% in 2022. Despite this decline, average rent prices have shown an overall upward trend, rising from $1,550 in 2017 to $1,595 in 2022, a 2.9% increase. This suggests that while fewer people are renting, those who do are facing higher costs. The population growth from 24,910 in 2017 to 27,754 in 2022 may have contributed to the upward pressure on rent prices despite the decreasing percentage of renters.
In 2023 and 2024, the housing market in zip code 55123 showed signs of stabilization. The average home price slightly decreased to $459,094 in 2023 before marginally increasing to $461,352 in 2024. This period coincided with a significant rise in federal interest rates, reaching 5.02% in 2023 and 5.33% in 2024, which may have moderated home price growth and potentially impacted affordability for some buyers.
Looking ahead, predictive models suggest that average home prices in zip code 55123 may continue to rise moderately over the next five years, potentially reaching around $500,000 by 2029. Average rent prices are also expected to increase, possibly surpassing $1,800 per month within the same timeframe. These projections are based on historical trends and current market conditions.
In summary, zip code 55123 has experienced a clear trend towards increased homeownership and rising property values over the past decade. The area has shown resilience in its housing market, with homeownership rates continuing to climb even as average home prices have increased substantially. The rental market, while shrinking in terms of percentage, has seen steady increases in average rent prices. The recent stabilization in home prices, coupled with higher interest rates, may signal a new phase in the local housing market dynamics.
