Between 2018 and 2023, millennials became a powerful force in Arkansas real estate.
Their choices shaped everything from where new homes were built to how sellers priced their listings.
Some bought starter homes in up-and-coming suburbs, while others skipped straight to larger properties or even second homes.
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The late 2010s and early 2020s saw many millennials finally catching up on homebuying despite high costs.
Generational market share shifted during this period.
In Arkansas, this generational shift was evident as millennials outnumbered Gen X and Boomers among homebuyers.
The vast majority of millennial buyers chose single-family homes.
Arkansas is a very homeowner-oriented, low-density state with plentiful land, and the housing stock reflects that.
Nearly 88% of owner-occupied homes in Arkansas are detached single-family houses as of 2022.
These range from older starter houses under 1,500 square feet to newer suburban homes with yards.
Millennials, especially those starting families, have gravitated toward these traditional homes with some space and privacy.
Limited Condo Market
Condos and townhomes are exceedingly rare in Arkansass homebuying mix.
In 2022, only about 1.1% of owner-occupied homes were townhouses or condos in the state.
Unlike some states where condos are a common starter home for young buyers, Arkansass condo market is tiny.
Most millennials who can afford to buy prefer a home with a yard if possible.
Overall, the property preferences of Arkansas millennials skew heavily toward standard houses.
Unlike in expensive urban states, there was no significant shift toward micro-units or condos among young buyers.
By 2022, the median value of owner-occupied homes had climbed into the mid-$170,000s.
And as of mid-2024, the median list price for Arkansas homes hit about $300,000.
This comparative affordability attracted some out-of-state young buyers to Arkansas as well.
Eroding Affordability for Locals
Affordability for local millennials did erode significantly by 20222023.
Housing costs rose faster than incomes, and mortgage interest rates jumped in 2022.
Even millennial homeowners in Arkansas had a median family income of about $78,000, modest by national standards.
Responses to Affordability Pressures
Millennials responded to these affordability pressures in a few ways.
As affordability tightened in 20222023 with higher rates, millennial buyers began scaling back their ambitions.
Many started purchasing smaller homes or homes needing renovation to make the numbers work.
Upsizing, Downsizing, or Staying Put?
Upsizing (buying larger homes) was especially notable in 20202021.
Low interest rates and Arkansass affordability made it feasible for moderate-income households to buy bigger.
The late 2010s and especially the pandemic years saw lots of millennials upgrading to larger homes.
Many were first-time buyers upsizing straight from renting an apartment to owning a single-family home.
Others were older millennials selling their starter home and buying a bigger second home.
In 20202021, scenic areas of Arkansas experienced a brief boom in vacation-home buying.
Some of these buyers were Arkansans (including affluent older millennials) purchasing weekend lake houses.
Others were out-of-state remote workers bringing big-city incomes and buying affordable vacation properties in Arkansass natural areas.
However, this trend was relatively limited and short-lived.
By 20222023, demand for second homes plunged.
Urban vs. Millennial homebuying preferences showed distinct patterns in where they chose to live.
The FayettevilleSpringdaleRogers metropolitan area (which includes Bentonville) is the states economic powerhouse and saw strong population growth.
This migration contributed to high housing demand in the region.
Millennials were a big part of this urban-ward shift, as they sought employment and amenities available in cities.
Central Arkansas Growth
The Little Rock metro area (Central Arkansas) was another focal point.
Suburban communities of Little Rock (like Benton, Bryant, Conway, etc.)
saw millennial families settling in for a mix of urban convenience and affordable space.
The bigger movement was actuallyintoArkansas (and into its attractive areas) by people from out-of-state.
Out-of-State Migration
Arkansass natural beauty and low costs also attracted out-of-state millennials to move in.
In Arkansass 20182023 market, millennial buyers often turned to low-down-payment loans and creative strategies to afford homes.
Popular Loan Types
FHA loans (Federal Housing Administration loans) were popular among first-time millennial buyers.
Nationwide, about 82% of all FHA borrowers in 2023 were first-time buyers many of them millennials.
Down Payment Strategies
The typical down payment for millennial buyers was much lower than 20%.
Saving for a down payment was cited as the biggest hurdle by many young buyers.
In 2023, first-time buyers (predominantly millennials) generally made smaller down payments than repeat buyers.
Realtor surveys show younger buyers commonly put down around 6-7% of the purchase price on average.
Many millennials utilized down payment assistance programs or scraped together funds from multiple sources.
Interest Rate Impact
Low interest rates in 20202021 helped millennials afford more house with smaller down payments.
Many millennials took advantage of these conditions to buy sooner rather than later.
The period also saw historically low mortgage rates followed by a sharp rise.
Many Arkansas millennials locked in 30-year rates below 4% during 20182021, which significantly improved affordability.
Many millennials were just entering the workforce in those years or graduating college into a weak economy.
Homeownership rates for young adults fell nationwide.
The Great Recession suppressed homeownership across all generations but was particularly damaging to millennials.
Many continued to rent or lived with parents.
The term Generation Rent was coined as homeownership rates among under-35s hit historic lows around 2015.
A Boom and New Challenges
20182023 was almost a complete reversal of fortune.
They started buying homes in droves, especially as they settled down to start families.
One big difference is price trajectory.
Millennials unfortunately largely missed the window of cheap post-crash prices and ended up purchasing during a new price upswing.
Millennials flocked here, fueling housing demand.
These were well above the state median, reflecting the popularity and prosperity of NWA.
The region also saw many out-of-state millennial transplants, which injected diversity and additional demand.
Home prices here rose as well, though not as steep as in NWA.
The median sale price in the Little Rock metro was around $235,000 in 2023.
However, many rural counties in Arkansas lost population in this period, as young people moved out.
Those who stayed often already had family land or houses passed down.
So while rural millennial homebuyers exist (buying farms, country homes, etc.
), the net trend was fewer millennials living in those areas by 2023 compared to 2018.
Arkansas was no exception rental property investors targeted low-priced starter homes to turn into rentals.
This phenomenon certainly influenced millennials experience.
