Report: Continued rate hikes curbing home sales

Home sales remain slow as homeowners stick with their mortgage rates, according to the biannual residential Arvest Skyline Report out Tuesday.

Why it matters: Housing prices and rents largely dictate who can afford to live in Northwest Arkansas and the wages they need to maintain a reasonable quality of life.

• Lower- and middle-range wage earners in NWA have found it increasingly difficult to buy a home or rent living space.
• Reality check: Though initiatives are underway to build more attainable housing and educate investors about options, measures are limited and relief is likely years away.

The big picture: Consumers are still spending, but home buying — typically a family's largest expense — has slowed due mortgage rate increases.

By the numbers: The average sales price for a single-family home during the first half of 2023 in Benton County was $422,564, up 5% from six months earlier. It was $392,306 in Washington County, up 4.3%.

• Those prices are up 77% in Benton County and 66% in Washington County from the middle of 2018.
• The number of homes sold in both counties dropped nearly 9% during the first six months of the year, compared to the same period in 2022.
• Multifamily vacancies in the two-county area rose slightly to 2.2% from 1.6% at the beginning of the year. Skyline authors say this was due to more than 800 new units opening in Benton County and student turnover in Fayetteville (Washington County).

• Average rent prices were up 10.6% to $952 from $860 a year earlier.

Of note: Nearly 39% of the homes sold in the first half of the year were new construction.

What we're watching: 2,309 residential building permits — a broad measure of how much construction is underway — were issued in the first half of 2023, down from nearly 2,900 a year earlier.

• Multifamily building-permit value — another broad measure of activity — was $263 million, down from $371 million a year earlier.