Northwest Arkansas 2Q23
Multifamily Market Report
Supply & Demand
Annual Demand vs Completions
After demand turned to negative territory for the first time in 16 quarters in the opening quarter of the year, Q2 witnessed a rebound in renter demand marking a return to positive territory with 276 units absorbed in the period.
A closer look at this quarter’s leasing activity reveals that the northern region of the market emerged as a hotspot for renters. Specifically, Bentonville and Rogers saw an upsurge in demand, with these two areas alone accounting for the absorption of 249 units – a considerable portion of the total leased units this quarter.
In Q2 2023, the apartment inventory of Northwest Arkansas increased by 394 units. This brings the year-to-date tally to 557 units, approximately 35% of the total expected units to be introduced into the rental market this year.
Later this month marks the launch of the 202 Railside development, an urban-style apartment community in downtown Springdale.
Driven by numerous economic advantages and the influx of highly skilled residents, robust demand is expected to persist. This ongoing demand, coupled with the region’s growing reputation as a hub for tech and innovation, sets the stage for an optimistic outlook for multifamily investors.
Expect Fayetteville to have a strong Q3 due to an increase in unit absorption coinciding with the beginning of the school year. Similarly, Bentonville, Springdale, and Rogers should benefit from robust economic growth.
Five new communities are slated to launch in the second half of the year. Four will be in the northern communities of the market, while Fayetteville will see the 76-unit Cedar Crest II community open in December.
Set to be the most significant development opening this year, the Town Branch project, with 360 units, is eagerly awaited. Located in downtown Bentonville, this residential community will not only offer a wealth of amenities but also provide residents with the convenience of walkability to the market area and close proximity to the new world headquarters of Walmart.
Occupancy & Rent Trends
In the second quarter, the Northwest Arkansas market logged an overall occupancy rate of 96.3%, indicating a tight vacancy situation and a rate well above the national average of 94.7%. Occupancy had nearly hit 99% in the first quarter of 2022. Since then, developers have alleviated occupancy constraints by supplying a steady stream of units over the past year. This has helped to achieve a healthy balance between supply and demand. However, the Class C sector continues to experience significant strain, with occupancy rates in this segment standing at an elevated 99.3%. A conspicuous dip from 97.3% to 95.7% in the Class B segment’s quarter-over-quarter occupancy rate suggests a considerable movement of renters either downgrading to more cost-efficient housing or upgrading to the high-end amenities of newly launched Class A properties.
The need for continued apartment development in Northwest Arkansas is highlighted by the fact that five of the primary ZIP codes that constitute the NWA market reported occupancy rates above 97.0%. The western outlying suburbs, encompassed by ZIP code 72761, reported the highest occupancy rate of 99.1%, which is attributed to the relatively few apartments located within this area. Additionally, the central area of Rogers, corresponding to ZIP code 72756, also recorded a very high rate of 98.3%. In contrast, Bentonville, which has seen a significant influx of new units in recent quarters, reported an occupancy rate of 94.6%.
The second quarter of 2023 demonstrated continued strong performance in the Northwest Arkansas market. Northwest Arkansas recorded an annual rent growth of 8.2%. This has helped maintain its position among the top ten gainers for rent among the 150 largest apartment markets in the nation for the third consecutive quarter. This sustained growth reflects the region’s growing affluent population, as Class A properties maintained double-digit rent growth of 10.1% for the eighth consecutive quarter. Concurrently, Class C properties have been experiencing accelerating rent growth in recent quarters, driven by extremely tight occupancy within this segment. As a result, Class C properties recorded a new record high rate of rent growth measuring 9.7% in the second quarter. In contrast, Class B properties experienced a noticeable decline in annual rent growth, dropping from 12.5% in the previous quarter to 5.1% in the second quarter. This suggests that residents in this segment may be either upgrading to Class A units or downsizing to Class C units.
Looking at city-level trends, the central area of Rogers, specifically ZIP code 72756, demonstrated the highest rate of rent growth in the market, reaching 12.9%. Following closely behind, the city of Centerton, which recorded a growth rate of 12.1%. Additionally, the east portion of Springdale, corresponding to ZIP code 72764, recorded an impressive gain of 11.6%.
Submarket Rent & Occupancy
|Submarkets||Average Occupancy||Annual Occupancy Change||Average Monthly Rent||Annual Rent Change|
|Centerton - [ZIP: 72719]||96.7%||0.9%||$1,160||12.1%|
|Central Rogers - [ZIP: 72756]||98.3%||-0.8%||$937||12.9%|
|Rogers I-49 Cooridor - [ZIP: 72758]||94.8%||-1.9%||$1,328||6.8%|
|West Outlying Suburbs - [ZIP: 72761]||99.1%||-0.9%||$689||11.7%|
|Fayetteville - [ZIP: 72701]||97.9%||-1.5%||$903||9.4%|
|W. Springdale/Tontitown - [ZIP: 72762]||96.9%||-2.0%||$1,133||3.5%|
|NE Fayetteville - [ZIP: 72703]||97.8%||-1.4%||$1,124||10.8%|
|East Springdale - [ZIP: 72764]||96.4%||-1.1%||$884||11.6%|
|West Fayetteville - [ZIP: 72704]||99.2%||1.1%||$926||9.8%|
|Bentonville - [ZIP: 72712]||94.6%||-1.3%||$1,269||7.0%|
Units Delivering in 2023
Click map pin locations to learn more
Despite the challenging conditions in the capital markets, investment activity in Northwest Arkansas remained steady in the first half of 2023. Investors committed to $130 million in conventional multifamily property transactions through June of this year. This region has been attracting new investors due to several factors, including a booming economy and strong population growth. The primary drivers of sales volume over the past year have been Northeast Washington County, and Central Benton County. The pursuit of newer properties by investors has been instrumental in pushing up the price per unit in the market. In particular, the demand for Class A assets has surged, leading to a year-over-year increase of 12% in the average price per unit when comparing the first half of 2023 to the same period in 2022.
YTD Transaction Volume
Individual Transaction Count
Price Per Unit
Annual Price Change
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
In May 2023, the Northwest Arkansas area posted substantial job growth, adding 14,700 new positions year-over-year as reported by the Bureau of Labor Statistics (BLS). Significant job gains were seen across multiple sectors. The trade, transportation, and utilities sector led the way by adding 3,200 new jobs, growing by 5.3%. This was closely followed by the professional and business services sector, which added 1,900 jobs, a growth rate of 3.3%. The leisure and hospitality sector also made a notable contribution, adding 2,200 jobs for a growth rate of 7.6%. The unemployment rate in Fayetteville was impressively low in May, at just 1.9%, reflecting a thriving local economy with robust growth across various job sectors.
Top 5 Employment Sector Annual Change
Change from May 2022
to May 2023: 3,200
Percent Change: 5.3%
Change from May 2022
to May 2023: 2,400
Percent Change: 5.9%
Change from May 2022
to May 2023: 2,200
Percent Change: 7.6%
Change from May 2022
to May 202: 1,900
Percent Change: 3.3%
Change from May 2022
to May 2023: 1,700
Percent Change: 11.7%
Hover over circles to view data
|Sector||Change from May 2022 to May 2023||Percent Change|
|Trade, transportation, and utilities||3,200||5.3%|
|Leisure and hospitality||2,200||7.6%|
|Professional and business services||1,900||3.3%|
|Mining, logging, and construction||1,700||11.7%|
|Education and health services||1,400||4.2%|
Major Economic Developments
Walmart World HQ
$1.0B Investment for new HQ Campus
18k New Campus will accommodate a larger workforce
Bentonville Location of new HQ
30 Buildings Under Construction
2025 Completion of project
Alice L. Walton School of Medicine
New Medicine School located in NWA
154k SF New Four-Story Facility Being Built
1,000 Jobs generated
Fall 2025 Inaugural Class
The Aronson at Fayetteville
Investment Estimated total Investment
Project 200 single-family-rental housing units, retail & restaurant space. Plus AR's first Alamo Drafthouse Cinema
Fayetteville Located at 3552 Hwy 112
2024 First phase opens
The forecast for Northwest Arkansas continues to be optimistic, propelled by a versatile local economy, impressive job growth, and an exceptional quality of life. Walmart’s ongoing investment in the region, especially in high-paying, high-tech roles, is poised to contribute significantly to the area’s sustained economic prosperity. Population increases and corporate expansion are expected to keep stimulating the demand for multifamily housing in the region, particularly in the Springdale, Rogers, and Bentonville submarkets. Opportunities abound for developers and investors to tap into this demand, as the region’s cost-effective living conditions and strategic location continue to draw businesses and workforce. The development of world-class amenities and improvements to infrastructure will only further amplify the region’s appealing live-work-play environment. Thus, Northwest Arkansas is primed for ongoing growth in the years ahead, bolstered by a diverse economy, robust job market, and superior quality of life.