FAYETTEVILLE, Ark. (KNWA/KFTA) — In the second half of 2022, Northwest Arkansas home sales dropped while home inventory rose over 100%, according to the latest Arvest Bank Skyline Report released on March 14, 2023.
Home sales dropped 20.8% compared to the second half of 2021, falling from 6,030 to 4,774, the report states. Maria Lau, senior vice president and mortgage loan manager with Arvest Bank of Benton County has seen fewer customers interested in buying because of higher interest rates.
“At Arvest, we have certainly seen fewer customers seeking mortgages as a result of higher interest rates, so this report on the real estate market in the second half of last year is not surprising,” she said.
The slowdown in home sales has resulted in an increase in homes listed. Year-to-year, homes listed for sale on Multi Listing Services (MLS) went from 584 to 1,618, or a 177% increase.
Benton County saw a drop in home prices for the first time in several years by 0.5%, whereas home prices in Washington and Madison counties increased.
“We feel that home prices stabilizing and inventory growing will likely encourage more people into the market again,” Lau said.
Lease rates have increased for multifamily units from the first half of the year. The average rate rose 7.6%, from $860.87 to $926.55, according to the report.
The Director of the Center for Business and Economic Research (CBER) at the Sam M. Walton College of Business at the University of Arkansas, Mervin Jebaraj, finds the latest changes in the marketplace could benefit NWA short term.
“We have been saying for some time that home prices in Northwest Arkansas have needed to stabilize in order for the region to continue to be an attractive and affordable place to call home,” Jebaraj said. “I believe that the leveling of price increases are an opportunity for the market to potentially recalibrate at a more sustainable pace.”
At Arvest, Lau said they are focusing on helping renters become homeowners.
“One of our main focuses will be to help customers who have been in apartment homes make the jump to owning now that more homes are for sale and price increases have slowed,” Lau said.
The Arvest Skyline Report is a biannual analysis of the latest commercial, single-family residential, and multifamily residential property markets in Northwest Arkansas. It is sponsored by Arvest Bank and conducted by the CBER, according to the report.