Rents dip nationally, but vacancies remain tight in NWA
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The median U.S. asking rent fell 0.4% year over year to $1,937 in March, per a Redfin analysis — the first drop since March 2020.
- But in Northwest Arkansas, rent is 27% higher than two years ago — an average asking price of $926 at the end of 2022 — and vacancy rates remain low.
Why it matters: Rising rent prices make it harder for lower- and middle-range wage earners to afford living in NWA.
- Regional and national experts have warned that unattainable housing could price out essential workers like teachers, service employees and firefighters.
What's happening: The average asking rent in NWA at the end of 2020 was $729. The price has increased every six months through the end of 2022, according to data from the Skyline Report.
Zoom out: National demand for rental property is falling because people appear to have reached their price limits, Axios' Emily Peck reports.
- Rents are still 20% higher than right before the start of the pandemic, overall inflation is hurting and there's growing economic uncertainty.
- Meanwhile, supply is rising because hundreds of thousands of newly constructed multifamily apartments came on the market in 2022 — built at a record pace — per an analysis of Census data on new residential construction.
By the numbers: Vacancy rates in NWA's four largest cities have consistently dropped despite new multifamily housing being built and leased in both Benton and Washington counties.
- Vacancy rates were between 1% and 2.4% at the end of the year, according to the Arvest Skyline Report.
- Multifamily building-permit value — a broad measure showing that more apartment space is under construction — was $333 million, down from $371 million as of June 30, 2022.
- By comparison, multifamily building-permit value was $216 million in the second half of 2021, up from $204.5 million in the first half of 2021.
Reality check: The national numbers don't mean everyone can suddenly afford a better place to live. Rents are still historically high.
- While they're down 9% from last year in Chicago and 11% in Austin, rents are still soaring in Raleigh, North Carolina (up 17%) and Cleveland (15%).
What we're watching: Bentonville recently created a housing affordability workgroup and has pledged to implement policies to create an environment where developers can build moderately priced housing in areas with convenient access to jobs, services and amenities.