Rent vs buy in Arkansas
Based on today's numbers over 7 years, 8 of the 9 cities of 50,000+ favor renting and 1 favors buying.
Renting or buying in Arkansas's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Little Rock | Rent | renting wins by $15k | year 12 | $219,657 | $1,184 |
| Fayetteville | Rent | renting wins by $54k | none in 30 years | $379,367 | $1,581 |
| Bentonville | Rent | renting wins by $109k | none in 30 years | $490,040 | $1,651 |
The Zillow Home Value and Observed Rent indexes provide the data; our rent vs buy method yields the verdicts, using 20% down over 7 years.
Our take on Arkansas
Over 7 years, renting wins in 8 of the 9 largest cities in Arkansas, where the typical home value is a low $224k. North Little Rock alone favors buying: the typical home there is $167,356 and monthly rent is $1,128. There, year 6 is when you break even, and after 7 years you're $7k ahead. In Little Rock, rent of $1,184 with a $219,657 home means your break-even point arrives in year 12, and renting wins by $15k.
In pricier cities, the gap widens fast, in our view. Rent for a $379,367 home in Fayetteville runs $1,581, so renting saves you $54k over 7 years. In Bentonville, the typical home costs $490,040 while monthly rent is $1,651. There, 30 years isn't enough to break even, and renting wins by $109k. Fort Smith and Jonesboro cost less, but you still have to stay until year 10 to break even.
Why does renting work so well for you? Statewide numbers explain it. Roughly 34% of households rent, which is close to the 35% US mark. The median rent for renters is $947 a month, against $1,413 nationally. Buying means a property tax of 0.55%, which beats the 0.94% US rate. Homeowners insurance still runs you $1,385 a year, against $1,308 nationally. Over the last 10 years, home prices rose 6.4% a year, above the longer run pace of 3.8% a year.
Our take: rent in Arkansas, except in North Little Rock or when your stay in a cheap city reaches 10 years. In pricier cities, we think renting leaves you better off.