MARKET SNAPSHOT
$1,142 3Q 2024
94.9% 3Q 2024
601 [YTD: 1,252]
2.5% 3Q 2024
0 BASIS POINTS
530 [YTD: 1,165]
Net absorption has outpaced new unit completions for the second consecutive quarter, bringing the year-to-date net absorption total ahead of completions by the close of the third quarter.
Annual rent growth in Northwest Arkansas stabilized at 2.5% in the most recent quarter, recovering from a more modest 1.5% annual increase recorded at the start of the year. This performance was boosted by the mid-tier property segment, which saw a 2.7% annual growth rate.
As of the third quarter of 2024, the rental housing market in Northwest Arkansas remains strong, bolstered by robust demographic growth in key submarkets and a steady, sustainable pace of development.
Net absorption has outpaced new unit completions for the second consecutive quarter, bringing the year-to-date net absorption total ahead of completions by the close of the third quarter. Leasing activity was notably strong during this year’s spring and summer seasons, albeit slightly below the absorption highs of 2021. However, net absorption for the past two quarters still surpasses nearly every other second and third quarter since 2014. Central Benton County remains a primary hub for rental demand, with over 900 units absorbed on a net basis in the past 12 months. The submarkets of Northeast Washington County, Fayetteville, and Southwest Benton County also posted solid net absorption rates over this period, reflecting robust demand across the region.
Construction activity in Northwest Arkansas remains elevated but within levels that local rental demand can absorb, contrasting with the rapid development pace seen in many Sun Belt markets over the past three years. As of the third of 2024, approximately 2,300 units, representing 5.3% of total inventory, are under construction. This activity is largely concentrated in the submarkets of Central Benton County, Fayetteville, and Northeast Washington County. While new supply may impact the region’s occupancy rate in the short term, a slowdown in construction starts throughout 2024 is likely to ease occupancy pressures by late 2025 and into 2026.
Northwest Arkansas has benefited from steady demand, with the stabilized occupancy rate ending the third quarter at 94.9% and holding relatively steady over the past year. Although occupancy may experience some pressure from the current, slightly elevated level of units under construction, rates are projected to remain stable within a narrow 10 to 20 basis point range over the next four quarters, barring any economic slowdown. Among the region’s eight submarkets, three recorded slight increases or maintained occupancy levels from last year. The Northeast Washington County submarket saw the most significant gain, with average occupancy rising by 120 basis points to end the quarter at 96%. While seven submarkets experienced minor declines compared to last year, the decreases were modest, ranging between 10 and 40 basis points.
Annual rent growth in Northwest Arkansas stabilized at 2.5% in the most recent quarter, recovering from a more modest 1.5% annual increase recorded at the start of the year. This performance was boosted by the mid-tier property segment, which saw a 2.7% annual growth rate. In contrast, supply-side pressures moderated growth in the luxury segment, which registered a 2.0% increase. Among the larger submarkets, Central Benton County, where many recent deliveries have been concentrated, recorded the highest average rents at approximately $1,270 per unit, with a 1.5% annual growth rate. Fayetteville led in percentage growth, posting a 4.9% increase among submarkets with at least 1,000 units of inventory. Overall, seven of Northwest Arkansas’s eight submarkets saw annual rent increases, while East Benton County, characterized by a low inventory of units, experienced a decline in average rents.
Northwest Arkansas continues to demonstrate economic resilience, anchored by its three Fortune 500 companies—Walmart, Tyson Foods, and J.B. Hunt—and a robust network of supporting industries. This strong foundation has allowed the region to outpace national job growth year-over-year since 2010. Between August 2023 and August 2024, total nonfarm employment in the region grew by 9,400 jobs, a 3.1% increase. Leading this growth, the Education and Health Services sector added 2,700 jobs, marking a 7.7% increase, while Mining, Logging, and Construction expanded by 8.3% with 1,400 new jobs. Government employment also rose significantly, with 1,900 new jobs representing a 4.8% gain, and Manufacturing followed closely with an additional 1,300 jobs (4.3%). With an unemployment rate at just 2.6%, well below the national average of 4.2% in August 2024—Northwest Arkansas stands out as a stable and vibrant market, positioned to navigate economic uncertainties more effectively than many regions.
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: 2,700
Percent Change: 7.7%
Nominal Change
from August 2023
to August 2024: 1,900
Percent Change: 4.8%
Nominal Change
from August 2023
to August 2024: 1,400
Percent Change: 8.3%
Nominal Change
from August 2023
to August 2024: 1,300
Percent Change: 4.3%
Nominal Change
from August 2023
to August 2024: 1,200
Percent Change: 2.0%
| Sector | Nominal Change from August 2023 to August 2024 | Percent Change |
|---|---|---|
| Education and Health Services | 2,700 | 7.7% |
| Government | 1,900 | 4.8% |
| Mining, Logging, and Construction | 1,400 | 8.3% |
| Manufacturing | 1,300 | 4.3% |
| Professional and Business Services | 1,200 | 2.0% |
| Leisure and Hospitality | 700 | 2.2% |
| Trade, Transportation, and Utilities | 200 | 0.3% |
| Financial Activities | 100 | 0.8% |
| Other Services | 100 | 0.7% |
| Information | -100 | -4.2% |
The Springdale Northern Bypass will be a four-lane, divided, fully controlled access highway with interchanges at key locations. It will feature two 12-foot travel lanes in each direction, separated by a variable-width median.
The Alice L. Walton School of Medicine received the necessary accreditation in October 2024 to begin recruiting students for its inaugural class.
Designed as a campus of the future, Walmart is pursuing an extensive range of features that will set a new standard for what a corporate headquarters can be.
As of the third quarter of 2024, the rental housing market in Northwest Arkansas remains strong, bolstered by robust demographic growth in key submarkets and a steady, sustainable pace of development. Looking ahead to 2025, rent growth is projected to exceed 3.0% by mid-year. This coincides with Walmart’s transition of its substantial workforce to its new global headquarters in downtown Bentonville—a state-of-the-art campus designed to set new standards for corporate facilities, complete with amenities like daycare and healthcare facilities. This campus will eventually consolidate Walmart’s workforce in a single central location, further boosting demand in the area.
The long-term outlook for the Northwest Arkansas multifamily market is exceedingly positive. The Alice L. Walton School of Medicine will welcome its inaugural class in July 2025, marking another milestone for the region. Additionally, local and state governments are actively supporting projected population growth, which is forecasted to reach 1 million residents by 2050, with initiatives such as the U.S. 412 bypass project. These developments collectively reinforce Northwest Arkansas’s appeal as a vibrant, growing community with a strong economic foundation and increasing demand for rental housing. With strategic infrastructure investments and world-class institutions on the horizon, the region is well-positioned for sustained growth and long-term stability in the multifamily market.
Sources: Costar; ESRI; U.S. Census Bureau; Yardi Matrix; U.S. Bureau of Labor Statistics
