Jun 4, 2024 - Business

NWA's built-to-rent housing slower than national trend

The bar chart displays metro areas with the most single-family units completed from 2018 to 2023, with Phoenix leading the way with 9,345 units, followed by Dallas-Fort Worth with 6,512 units and Atlanta with 3,536 units. Northwest Arkansas had 594 units.
Data: RentCafe; Note: Includes homes in professionally managed communities with at least 50 rental units; Chart: Axios Visuals

Nearly 600 built-to-rent community units were raised in NWA from 2018 to 2023, according to RentCafe.

Why it matters: Mortgage rates hovering near record highs for the year have fueled a proliferation of those communities, which offer amenities, property-management perks — and no mortgages.

The big picture: Such developments are typically popular in the Southeast, Southwest and Sunbelt, where land costs less, but they're slowly catching on in other parts of the country.

  • NWA's activity is relatively low compared to other metro markets.

Between the lines: Built-to-rent communities are particularly appealing to those who want more space but can't afford to buy a house, as well as empty nesters seeking less home upkeep, experts say.

A line chart that displays the semi-annual average multi-family rent prices in Northwest Arkansas from January 2021 to January 2024. The rent started at $729.82 in January 2021, increased to $741.36 by June 2021, and continued to rise, reaching $1,005.40 by January 2024. The chart shows a consistent upward trend in rent prices.
Data: Arvest Skyline Report; Chart: Axios Visuals

Zoom in: NWA's single-family homes are increasingly more expensive. The average selling price during the second half of 2023 in Benton County was $420,144, and $386,695 in Washington County — both down slightly from the previous six-month period, according to the most recent Arvest Skyline Report.

  • Yes, but: Those prices are up 123% in Benton County and 110% in Washington County from a decade earlier.

Meanwhile, average rent prices continue to climb — up nearly 38% since the start of 2021.

Zoom out: The number of built-to-rent community houses completed nationwide jumped 75% from 2022 to 2023, reaching an all-time high of nearly 27,500 homes, RentCafe reports.

  • More than 45,400 are now under construction, per the analysis.
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