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Zip Code 72704: Rising Home Values and Ownership in University-Adjacent Fayetteville
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 72704, located in Fayetteville, Arkansas, is home to the University of Arkansas and has experienced significant changes in its housing market over the past decade. The area has seen notable shifts in homeownership rates, average home prices, and average rent prices, reflecting its growing popularity and economic development.
The homeownership rate in zip code 72704 has shown a gradual increase over time, rising from 51% in 2014 to 55% in 2022. This upward trend in homeownership coincides with a substantial increase in average home prices. In 2010, the average home price in this area was $167,301. By 2022, it had nearly doubled to $315,316, representing an impressive 88.5% increase over 12 years. This correlation suggests that despite rising home prices, more residents have been able to enter the housing market as owners.
The relationship between federal interest rates and homeownership rates in zip code 72704 follows a generally inverse pattern. For instance, when interest rates were at historic lows between 2020 and 2021 (0.38% and 0.08% respectively), homeownership rates increased from 53% to 54%. This aligns with the well-established trend that lower interest rates typically encourage homeownership by making mortgage financing more affordable.
Regarding rental trends, the percentage of renters in zip code 72704 has remained relatively stable, fluctuating between 45% and 49% from 2013 to 2022. Average rent prices, however, have shown a steady increase. In 2013, the average rent was $933, which rose to $1,127 by 2022, representing a 20.8% increase over nine years. This rise in rent prices occurred alongside population growth, with the area's population increasing from 24,539 in 2013 to 33,404 in 2022, a 36.1% increase. The growing population likely contributed to the demand for rental properties, supporting the upward trend in rent prices.
In 2023 and 2024, the housing market in zip code 72704 continued to evolve. The average home price reached $329,245 in 2023 and further increased to $339,649 in 2024, showing a 3.2% year-over-year growth. Concurrently, federal interest rates rose significantly, reaching 5.02% in 2023 and 5.33% in 2024, marking the highest rates in over a decade. These higher interest rates may impact future homeownership trends in the area.
Looking ahead, predictive models suggest that both average home prices and rent prices in zip code 72704 are likely to continue their upward trajectory over the next five years. Average home prices are projected to increase by approximately 3-5% annually, potentially reaching around $390,000 to $410,000 by 2029. Average rent prices are expected to rise at a similar rate, potentially reaching $1,300 to $1,400 per month in the same timeframe.
In summary, zip code 72704 has demonstrated a robust and dynamic housing market over the past decade. The area has seen a steady increase in homeownership rates despite rising home prices, possibly influenced by periods of low interest rates. The rental market has remained stable in terms of occupancy while experiencing consistent growth in average rent prices. With continued population growth and the area's desirability, both the ownership and rental markets are poised for further expansion in the coming years.
