Oct 17, 2023 - Real Estate

Gen Z'ers, Baby Boomers spend most on rent in Northwest Arkansas

Share who spend 30 percent or more of their income on housing in the Northwest Arkansas area, 2022
Data: Census Bureau; Note: Based on household income. Householder is the person/people in whose name the housing unit is owned or rented. Renter housing costs includes monthly contract rent and utilities paid by the renter while owner costs includes monthly mortgage payments and other debts, utilities, real estate taxes, insurance, etc.; Chart: Simran Parwani/Axios

43% of Northwest Arkansas' youngest renters spent at least 30% of their income on rent last year — above the national average.

  • Of renters 65 and older, the stat jumped to 58%, according to the latest U.S. Census data.

Driving the news: Average NWA rent prices were $952 this summer, up more than 10% from a year earlier, according to the Arvest Skyline Report.

Why it matters: Steep prices and mortgage rates pose seemingly insurmountable hurdles to homeownership — and renting isn't necessarily an affordable alternative.

What's happening: One in three Gen Z-ers (34%) surveyed nationally by Freddie Mac say owning a home feels impossible in their lifetime, up from 27% in 2019.

  • Saving for a down payment is the biggest obstacle, they say. It's one reason the typical first-time homebuyer last year was a record-high 36 years old.

The big picture: Across the U.S., pinched young people are fanning out from big cities, returning to their childhood bedrooms or moving in with partners.

  • In all of the 100 biggest U.S. metros, more than one-third of renters ages 15-24 spend 30% or more of their income on housing, Axios' Simran Parwani reports.

Threat level: Older Americans on fixed incomes are also especially burdened by high housing costs, contributing to rising homelessness among Baby Boomers, The Wall Street Journal reports.

Yes, but: Particularly among older homeowners, ownership costs in Northwest Arkansas were generally more affordable than renting last year, per the census.

  • Only 18% of homeowners over 65 and just 15% of those 35-64 reported spending more than 30% of their income on housing — far less than the same age groups reported spending on rent.

Zoom in: As of June 30, home prices soared by 77% in Benton County and 66% in Washington County since the middle of 2018. Average selling prices were $422,564 and $392,306, respectively.

Be smart: The typical NWA resident spent 52% of their income on housing and transportation in 2021, per the Northwest Arkansas Council.

  • Transportation costs generally climb as people move farther from town centers and large employers for more affordable housing.

Go deeper: Student loan interest has started again, adding to affordability pressures.

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