Home sales, average prices and building permits increased in Northwest Arkansas as the multifamily vacancy rate rises but remains healthy, according to the Skyline Reports released Tuesday (Sept. 30).
However, residential developers are concerned about a lack of infrastructure, particularly sewer capacity, limiting development in multiple Northwest Arkansas cities, a report researcher said.
Arvest Bank[1], in collaboration with the Center for Business and Economic Research[2] (CBER) at Sam M. Walton College of Business at the University of Arkansas, released the Skyline Reports on residential and multifamily real estate in Northwest Arkansas for the first half of 2025.
Home sales rose by 5.2% to 5,049 homes in the first half of 2025 from 4,799 in the same period in 2024 but declined by 5.4% from 5,339 in the second half of 2024. This is the first time since the inception of the Skyline Report in 2004 that consecutive half-year periods exceeded 5,000 homes sold, and it’s the fourth time that home sales exceeded 5,000 in a half-year.
The average home price in Benton County increased by 8.9% to $471,427 from the same period last year and was up 4.8% from the second half of 2024. The price is 73% higher than it was five years ago. In Washington County, the average home price increased by 7.2% to $417,489 from the same period last year and rose 3.8% from the second half of 2024. The price is 74.6% higher than it was five years ago.
The average home price in Madison County increased by 25.7% to $321,676 from the same period last year and rose by 23.2% from the second half of 2024.
The number of building permits issued in Northwest Arkansas increased by 11.3% to 2,929 in the first half of 2025, from 2,631 in the same period last year. But this was down by 2.59% from 3,007 in the second half of 2024.
Sales of newly constructed homes in Northwest Arkansas comprised 1,844 or 36.5% of home sales in the first half of 2025. This was the fourth-highest total of new homes sold and the fifth-highest percent of new homes sold since the inception of the Skyline Report.
Homes listed for sale in the Northwest Arkansas MLS database increased by 67.8% in the past two years, rising from 1,591 in the first half of 2023 to 2,670 in the first half of 2025.
CBER Director Mervin Jebaraj said residential developers in Northwest Arkansas have started to become concerned about infrastructure, especially sewer capacity, impacting development in Bentonville, Centerton, Decatur, Elkins, Farmington and Rogers.
“With new construction being such a major driver of home sales in the region, we may begin to see the impact of infrastructure limitations in the near future,” Jebaraj said. “When you look at population projections from the U.S. Census Bureau for the area, they show population growth in the region’s major cities that cannot be supported with the current infrastructure, so this is an area that our local governments are going to have to address very soon.”
The multifamily vacancy rate in Northwest Arkansas increased from 3.3% in the first half of 2024 to 3.7% in the first half of 2025 as seven new apartment complexes with 639 units became available. By the end of the period, 320 of the 639 new units were still available. Siloam Springs’ vacancy rate was the lowest at 1%, followed by 1.7% in Springdale. Bentonville had the highest rate at 6%, primarily due to the addition of three new complexes with 347 units becoming available.
“Anytime the vacancy rate is less than 5%, that indicates a very healthy market, and the slight increase in vacancy rates from the prior year is only due to the number of new units entering the market and needing time to be leased,” Jebaraj said. “The only part of the multifamily market that is showing any signs of softening is the by-the-bed market in Fayetteville, where a large number of new units are coming online. This has led to some price pressures and a few price decreases in that student-focused market. We may see some of the older by-the-bed properties begin updating and renovating to remain competitive.”
In the first half of 2025, building permit values for multifamily projects decreased by 16.6% to $436.6 million from $523.8 million in the first half of 2024. Permits were issued for 25 apartment complexes in the first half of 2025. Current on Center, a 226-unit student housing project in Fayetteville[3], had the highest value at $60.5 million.
The average lease in Northwest Arkansas rose to $1,094.08 per month from $1,075.18 in the second half of 2024.
“The residential and multifamily real estate markets in Northwest Arkansas continue to demonstrate continued strength, balance and resiliency,” said Maria Lau, senior vice president and mortgage loan manager at Arvest Bank – Benton County. “There has been and will continue to be a need for more homes of all kinds as our population continues to grow. Our mortgage lending teams continue to work with customers to help them get into homes with innovative products and customer-facing local service.”
The Arvest Skyline Report is a biannual analysis of the commercial, single-family residential and multifamily residential property markets in Benton and Washington counties. The report is sponsored by Arvest Bank and conducted by CBER.
Link here[4] for the residential report.
Link here[5] for the multifamily report.
Related
References
- ^ Arvest Bank (www.arvest.com)
- ^ Center for Business and Economic Research (walton.uark.edu)
- ^ project in Fayetteville (talkbusiness.net)
- ^ Link here (talkbusiness.net)
- ^ Link here (talkbusiness.net)