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Zip Code 55812: Rising Home Values and Shifting Ownership Patterns in Duluth, 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 55812, located in Duluth, Minnesota, has experienced significant shifts in homeownership rates, average home prices, and average rent prices over the past decade. This area, known for its proximity to Lake Superior and the University of Minnesota Duluth campus, has seen a general trend towards renting, with homeownership rates fluctuating but ultimately declining from 2013 to 2022.
The homeownership rate in zip code 55812 decreased from 48% in 2013 to 45% in 2022, while average home prices showed a steady increase. In 2013, the average home price was $177,445, rising to $298,441 by 2022, representing a substantial 68% increase over this period. This inverse relationship between homeownership rates and average home prices suggests that rising property values may have made homeownership less attainable for some residents.
Federal interest rates have played a role in homeownership trends. From 2013 to 2016, when interest rates were historically low (ranging from 0.11% to 0.40%), homeownership rates remained relatively stable, hovering around 48-50%. However, as interest rates began to rise from 2017 (1.00%) to 2019 (2.16%), homeownership rates declined to 46%. The sudden drop in interest rates in 2020 (0.38%) and 2021 (0.08%) didn't immediately boost homeownership, possibly due to economic uncertainties during the pandemic.
The renter population in zip code 55812 increased from 52% in 2013 to 55% in 2022. Interestingly, average rent prices fluctuated during this period. In 2013, the average rent was $1,313, peaking at $1,496 in 2021 before decreasing to $1,277 in 2022. The population growth from 10,358 in 2013 to 10,941 in 2022 may have contributed to the overall increase in rental demand, despite the recent dip in average rent prices.
In 2023 and 2024, average home prices in zip code 55812 continued to rise, reaching $307,240 in 2023 and $318,599 in 2024. This represents a 3% increase from 2022 to 2023 and a further 3.7% increase from 2023 to 2024. Notably, federal interest rates also increased significantly during this period, climbing to 5.02% in 2023 and 5.33% in 2024, which may impact future homeownership rates.
Looking ahead, based on historical trends and current market conditions, we can anticipate continued growth in average home prices for zip code 55812. Projecting the current trajectory, average home prices could potentially reach around $350,000 to $370,000 by 2029. Average rent prices, which have shown more volatility, may stabilize or see moderate increases, potentially reaching $1,400 to $1,600 per month in the next five years.
In summary, zip code 55812 has experienced a shift towards renting, with homeownership rates declining as average home prices have significantly increased. The interplay between federal interest rates, population growth, and local economic factors has influenced these trends. As the area continues to evolve, it will be crucial to monitor how these dynamics shape the local housing market in the coming years.
