Northwest Arkansas home sales decreased by more than 10% in 2023
FAYETTEVILLE, Ark. (KNWA/KFTA) — Residential home sales declined by double digits in Benton and Washington counties in 2023 according to the Northwest Arkansas Board of Realtors.
Real estate agents sold 9,802 in those counties in 2023 which is a 10.3% percent decrease from 2022.
The 2022 numbers were down 11.6% from 2021.
Bentonville School District pushes ahead in affordable housing plan
Jeff Cooperstein, senior research associate at the Center for Business and Economic Research at the University of Arkansas Sam M. Walton College of Business, says existing home sales dropped because interest rates went up significantly last year.
As the rates go up, the more expensive it is to not only buy a house but to sell as well.
“With prices rising the way they did and then the interest rates creeping up the way they did and doubling, they really doubled and, in many cases, more than doubled, it really created an issue with affordability for a lot of buyers,” said Jason Smith, owner and principal broker of Smith and Associates Real Estate Services.
He says this slowed down their sales last year and the holiday season did too.
“People don’t want to move during the holidays. They want to spend time with their families and enjoy that time,” Smith said.
Cooperstein says people who have existing properties are also less likely to sell because of the current interest rates.
“If they have a low interest, let’s say they got a 3.5% loan a few years ago, well, if they sell their current house that they’re living with their 3.5% loan and they go into the market, they’re looking at a loan, around 7%,” he said.
He also says this causes existing home sales to drop.
“Those aren’t getting put back into the market to expand the overall inventory. And of course, if inventory is limited, that means that just puts upward pressure on prices,” Cooperstein said.
As mortgage rates start to go down and they build equity, Cooperstein says people will then start to put their homes up for sale.
“That equity becomes your down payment. So you have a bigger down payment that might lower the size of the mortgage. So, even with the higher interest rate, you still might be able to end up with the same kind of payments if you’re down payment is bigger than your initial down payment,” he said.
Smith says 2024 is a great time to sell your home because even though prices continue to rise, interest rates are starting to come down.
“Work with a seasoned professional that has a great supportive brokerage. So, you know what you’re getting,” he said.
For the latest news, weather, sports, and streaming video, head to KNWA FOX24.
