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Zip Code 95341: Rising Home Values and Rental Prices in Merced's University-Influenced Housing Market
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 95341, located in Merced, California, has experienced significant changes in its housing market over the past decade. This area, covering approximately 150.99 square miles, has seen fluctuations in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local market dynamics.
The homeownership rate in zip code 95341 has remained relatively stable, hovering around 40-42% between 2013 and 2022. However, this stability masks an interesting relationship with average home prices, which have seen substantial growth. In 2013, the average home price was $109,059, and by 2022, it had increased dramatically to $344,114, representing a 215% increase over nine years. Despite this significant rise in home values, the homeownership rate did not decrease substantially, suggesting a resilient local housing market and potentially strong economic factors supporting homeownership.
Federal interest rates have played a crucial role in shaping homeownership trends. From 2013 to 2016, when interest rates were exceptionally low (ranging from 0.11% to 0.40%), the homeownership rate remained steady at around 40-41%. As interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), there was a slight increase in homeownership to 42% by 2020 and 2021, possibly due to buyers rushing to secure mortgages before rates climbed further.
Renter percentages in zip code 95341 have consistently been higher than homeownership rates, ranging from 58% to 60% between 2013 and 2022. Average rent prices have shown a general upward trend, albeit with some fluctuations. In 2013, the average rent was $958, which decreased slightly to $888 in 2016 before rising again to $1,094 in 2021. Interestingly, 2022 saw a drop in average rent to $967, despite a population increase to 35,472. This could indicate a temporary market correction or increased housing supply meeting demand.
Looking at the most recent data, the average home price in 2023 was $337,147, showing a slight decrease from 2022. However, in 2024, the average home price has rebounded to $350,490. This increase coincides with a rise in federal interest rates to 5.33% in 2024, potentially indicating strong demand despite higher borrowing costs.
Applying predictive models to forecast 5-year trends, we can expect continued growth in average home prices, albeit at a potentially slower rate than seen in the past decade. Average rent prices are likely to resume an upward trajectory, driven by population growth and the high proportion of renters in the area. However, these trends may be moderated by economic factors and potential increases in housing supply.
In summary, zip code 95341 has demonstrated a resilient housing market with steadily increasing home values despite relatively stable homeownership rates. The area's high proportion of renters and fluctuating rent prices suggest a dynamic rental market responsive to local economic conditions. The recent uptick in home prices, even in the face of rising interest rates, indicates continued demand for housing in this Merced zip code.
