Report shows fewer homes being sold as rent prices increase

Elena Ramirez
·2 min read

FAYETTEVILLE, Ark. (KNWA/KFTA) — A report of the residential and multifamily data of Northwest Arkansas shows how price increases have affected homebuyers and renters in the second half of 2023.

The latest Arvest Bank Skyline Report, which was released Tuesday, says that Northwest Arkansas had a decrease in residential real estate with average home prices increasing in Benton and Washington counties. There was also an increase in existing home prices. Renters also saw an increase in rent prices along with more units available.

Home Prices in NWA for 2023

By the end of 2023, Northwest Arkansas saw a 263% increase in inventory of homes compared to 2021 from 584 homes for sale to 2,119, according to the Skyline Report.

The report also revealed a record-setting number of newly constructed homes being sold, with new builds accounting for 39.9% of homes sold.

“This indicates that more current homeowners are choosing to remain in their home than in the past as higher interest rates slow consumers’ desire to upgrade,” the release states.

The average price for newly constructed homes was $399,782 in Northwest Arkansas. In Benton County, the average price for a home in the second half of 2023 was $420,144, which is 71.5% higher than five years ago. In Washington County, the average home price was $386,695 which is 69.5% higher than five years ago.

The Skyline Report shows that in the second half of 2023, there was a 2.1% decrease in residential homes sold compared to the second half of 2022 and a 22.5% decrease from the second half of 2021.

Shedding equity: Housing slowdown leads to first annual drop in US homeowner equity since 2012

Rental units in NWA for 2023

Northwest Arkansas had 10 new apartment complexes enter the market in 2023. This helped increase the vacancy rate in the region from 2.2% a year ago to 3.1% in the second half of 2023.

Fayetteville City Council to discuss declaring housing crisis

Although there are more rental units available, the cost of renting has climbed with the average lease rate at $1005.40, up from $952.17 in the first half of 2023. In 2021, the average lease rate was $788.95. That translates to a 27.4% increase in the average lease in the last two years.

In all cities, there are, or will be, more rental units under construction. Below are the expected number of planned new units for each city.

  • Fayetteville 6,000 units

  • Bentonville 5,800 units

  • Rogers has 7,600 units

  • Siloam Springs 390 units

  • Springdale 2,100 units

The Skyline Report

The Skyline Report is a biannual analysis of the property markets in Benton and Washington counties. The report is sponsored by Arvest Bank and conducted by the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas.

The research is gathered from local real estate markets, local governments and property managers.

For the latest news, weather, sports, and streaming video, head to KNWA FOX24.