MARKET SNAPSHOT
$1,007 3Q 2024
90.6% 3Q 2024
238 [YTD: 590]
1.4% 3Q 2024
-10 BASIS POINTS
358 [YTD: 923]
Although net absorption remains below historical norms, the Conway submarket remains a strong performer, with over 600 units absorbed on a rolling 12-month basis.
With only around 700 units under construction, representing 1.2% of total inventory, new supply in Little Rock remains manageable. As such, occupancy or rent growth will largely hinge on rental demand moving forward.
Average effective rents in the area are $1,007 per month, offering a moderate discount compared to Northwest Arkansas, where average rents are approximately $1,150 per month.
Little Rock has faced inconsistent demand so far in 2024, resulting in a slight dip in the average occupancy rate compared to last year. Over the past three quarters, the market recorded net demand of 590 units, while over 900 new units were delivered, keeping occupancy rates under pressure. Although net absorption remains below historical norms, it represents an improvement from the sharp move-outs recorded in 2022 and early 2023. The Conway submarket remains a strong performer, with over 600 units absorbed on a rolling 12-month basis. However, this strength was counterbalanced by net move-outs in five of Little Rock’s other 12 submarkets during the same period, highlighting the varied demand dynamics within the market.
New supply in Little Rock remains manageable, with just roughly 700 units currently under construction, representing 1.2% of total inventory. Any potential impact on occupancy rates or rent growth will largely depend on rental demand. Current construction is concentrated in the North Little Rock, Midtown/Hillcrest, and Central East submarkets. Since 2014, most new developments have focused on the West Little Rock, North Little Rock, and Southwest/University submarkets, targeting areas with favorable demographic trends and stable population growth, especially in outlying suburban areas.
As of the third quarter of 2024, the average stabilized occupancy rate in the Little Rock multifamily market stood at 90.6%, slightly below the 10-year average of 91.7%. Although net absorption has been inconsistent, current levels show improvement from the significant move-outs seen in 2022. For owners and operators, maintaining occupancy remains a priority, particularly in mid- and low-tier communities that cater to renters by necessity.
Submarkets with stable demographic and economic drivers, such as Conway and Southwest/University, have shown consistent demand over the past year. Areas with the lowest vacancy rates—including Saline County, Conway, and Lonoke—each maintain occupancy levels above 95%, underscoring the relative strength of suburban neighborhoods that benefit from steady population growth outside of Little Rock proper.
As of the third quarter of 2024, rent growth in Little Rock stands at 1.4%, slightly surpassing the U.S. average of about 1%, bolstered by a substantial base of mid-tier properties that offer more stable rent trends. Outlying submarkets, particularly Conway and Saline County, are leading the market in rent growth, supported by favorable demographics such as higher incomes and steady population growth, which fuel demand. Rent performance varies by property class, with mid- and lower-tier properties showing growth rates of 2.8% and 2.3%, respectively, while higher-end properties reported a slight decline at -0.8%.
Approximately 75% of Little Rock’s multifamily inventory consists of mid- and lower-tier assets, which helps provide stability in rent growth. This structure gives multifamily owners and operators more flexibility to gradually increase rents, supported by Little Rock’s relative affordability and a stable price floor. Average effective rents in the area are $1,007 per month, offering a moderate discount compared to Northwest Arkansas, where average rents are approximately $1,150 per month.
In August 2024, the Little Rock, AR metro area added 8,900 jobs, marking a 1.7% increase in employment compared to the previous year. The Professional and Business Services sector led in job creation, adding 3,000 positions and achieving an impressive 6.2% growth rate. Following closely, the Education and Health Services sector expanded by 3.7%, contributing an additional 2,400 jobs since August 2023. The region’s unemployment rate remained low at 3.2%, well below the national average of 4.2%.
August 2024 ANNUAL JOBS CREATED
AUGUST 2024 EMPLOYMENT GROWTH
AUGUST 2024 Unemployment rate
4.2% us August rate
Nominal Change
from August 2023
to August 2024: 3,000
Percent Change: 6.2%
Nominal Change
from August 2023
to August 2024: 2,400
Percent Change: 3.7%
Nominal Change
from August 2023
to August 2024: 1,400
Percent Change: 2.1%
Nominal Change
from August 2023
to August 2024: 1,200
Percent Change: 5.6%
Nominal Change
from August 2023
to August 2024: 700
Percent Change: 3.5%
| Sector | Nominal Change from August 2023 to August 2024 | Percent Change |
|---|---|---|
| Professional and Business Services | 3,000 | 6.2% |
| Education and Health Services | 2,400 | 3.7% |
| Government | 1,400 | 2.1% |
| Mining, Logging, and Construction | 1,200 | 5.6% |
| Manufacturing | 700 | 3.5% |
| Financial Activities | 500 | 1.8% |
| Trade, Transportation, and Utilities | 300 | 0.4% |
| Other Services | 0 | 0.0% |
| Leisure and Hospitality | -200 | -0.6% |
| Information | -200 | -3.6% |
In December 2023, Dassault Falcon Jet announced a $100 million investment to expand its facilities at Little Rock’s Bill and Hillary Clinton National Airport, creating 800 new jobs over several years.
The Downtown Little Rock Master Plan is a strategic vision to revitalize the area by enhancing residential density, public spaces, and connectivity.
In November 2023, SIG SAUER announced a $150 million expansion of its Jacksonville, AR ammunition manufacturing facility, creating 625 new jobs in the process.
Little Rock, Arkansas, presents a compelling investment landscape for apartment investors, driven by a diverse and expanding economy. While government remains a core sector, robust growth in healthcare, education, and corporate services creates a strong foundation for rental demand. Major employers like the University of Arkansas for Medical Sciences (UAMS) and Fortune 500 firms such as Dillard’s and Stephens Inc. provide economic stability and attract a skilled workforce. Additionally, the city’s transformative downtown master plan aims to enhance cultural appeal and attract new residents by fostering a dynamic urban core. Combined with Little Rock’s affordability and business-friendly climate, these factors are expected to drive population growth and sustain multifamily demand in the coming years, positioning the market for steady long-term gains.
Sources: Costar; ESRI; U.S. Census Bureau; Yardi Matrix; U.S. Bureau of Labor Statistics
