Apartment rental costs rising in U.S., much of Arkansas

Apartment rent prices are rising across the nation and in two of Arkansas’ three largest metro areas, according to a report from San Francisco-based Apartment Lists. The Fort Smith metro has bucked the trend with a decline in rent rates.

Overall, national rent prices were flat over the past month, although rents were 2.8% higher in April over a year ago. Millennials migrating to cities for work opportunities and a limited supply of multifamily housing not part of university housing are helping to push rent prices upward. Comparable single family home rental prices have also risen because demand is outpacing supply.

In central Arkansas, Little Rock’s apartment rental costs have risen 0.8% year-over-year, according the Apartment List report. The median cost of a one bedroom unit is $660, while two bedroom units cost $800. In North Little Rock median apartment rents are up 1.4% from a year ago. The one bedroom rate is $610, while the two bedroom rate is $680.

One-bedroom apartment rentals in the Little Rock area are 12.5% less expensive than Bentonville, 42% cheaper than Rogers and cost 17% less than Fayetteville.

Fort Smith was only city listed in the state to show a slight reduction in rental rates from a year ago. The median cost of a two bedroom rental is $600, down 0.2% from April 2015. Median rates in Fort Smith are $400 per months cheaper than Fayetteville and roughly half the cost of Bentonville and Rogers.

In Northwest Arkansas, apartment rental costs have risen 5.4% year-over-year in Bentonville with the median one bedroom unit costing $720 per month, while two bedroom units are $1,300. In Rogers, where there is active multifamily building, median rents are up 6.3% in April over a year ago. A one bedroom unit cost $910, while two bedroom units were $1,170, according the the report. Bentonville and Rogers have not typically been large renter’s markets, with the majority of residents owning homes, but that is starting to change.

Fayetteville has always been a large renter’s market given the University of Arkansas and a more transient population. Median rents in April were up just 0.4% year-over-year. The median price for a one bedroom was $750 per month, while two bedroom units cost $1,000. Fayetteville has also added a plethora of college housing, more than 2,000 bedrooms in four student housing complexes in the past year.

Two more Fayetteville multifamily properties are expected to be finished in 2016. Those include: The Uptown, 308 units in Fayetteville; The Links, phase II, 516 units in Fayetteville will bring units online in the coming months.

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said there is much apartment construction in the region but units are rented soon after coming online, which has kept occupancy levels high.

Another report by CBRE found that rents in the region have risen 8.6% over the last three years – 3.3% in 2013, 1.5% in 2014 and 3.8% in 2015.