Thriving through change: Real estate trends point up

Many of us have heard the expression, “If you build it, they will come.” That logic certainly applies to Northwest Arkansas.

Now one of the fastest-growing regions in the U.S., the three-county corridor attracts workers and families with good-paying jobs and plentiful quality-of-life amenities, from cultural destinations to bike trails and a thriving restaurant scene.

While great news for economic development, the region’s rapidly expanding population is not without emerging challenges, particularly for homebuyers facing a highly competitive market. Will that change as the real estate landscape evolves?

Following a slower start to last year, the National Association of Realtors noted that 2024 concluded with the biggest year-over-year increase in existing home sales in more than three years, with an overall jump of 9.3% nationwide by Dec. 31. The uptick held into January.

According to Redfin, a technology-powered real estate company, the number of homes sold in Arkansas increased by 8.2%. Is this momentum expected to continue in the months ahead? If so, how will it impact buyers and sellers here in Arkansas? It’s still early in the year, but here are a few industry trends to watch as 2025 hits its stride.

• A steadily rising number of homes for sale
After what was perceived by some as a temporary slump, the U.S. Homebuilding and Building Products Research at J.P. Morgan recently stated, “Existing homes for sale have reverted to more normalized levels.” Greater inventory means more choices for home shoppers. That said, increased inventory also indicates that those selling their properties may face greater competition, reaffirming why many homeowners will seek expert guidance and support from licensed real estate professionals.

• An easing of the so-called “lock-in” effect
Despite the Federal Reserve’s announcement that it would make fewer rate cuts than initially predicted in 2025, the National Association of Realtors notes that the market is “resilient,” and buyer demand remains high. Pair this with lower mortgage rates and the jump in existing for-sale inventory, and we will likely see those previously reluctant to relocate to make a move (or a sale).

• Potential obstacles for first-time homebuyers
Unfortunately, this demographic’s annual share of home sales fell nationwide in 2024, which experts largely attribute to higher home prices and mortgage rates. However, improving job numbers, recent stock market gains and other factors could begin bridging the gap for younger Americans and first-time home buyers who were previously reluctant or unable to enter the market. According to NerdWallet, “An ambitious share of Americans is ushering in the new year with optimistic plans to buy a home.” The annual Home Buyer Report shows that 15% of respondents plan to buy in the next 12 months, up from 11%.

• A shifting national regulatory environment
While it is clear the federal government is currently in a unique state of flux, we have yet to see how any resulting regulatory policy changes will affect the housing market on a larger scale. On the state and local level, however, we are confident that consumer protection agencies, such as the Arkansas Real Estate Commission, will continue to enact commonsense measures to ensure residents can leverage professional services to buy or sell their homes with confidence and trust.

What’s on the horizon for our state’s housing market in 2025? One thing is sure. Northwest Arkansas is booming, and we should celebrate the region’s continued progress. Yes, this growth will bring new challenges as the housing market strives to meet increasing residential demand. Yet, anecdotal evidence and recent data reinforce why the Arkansas Realtors Association feels hopeful about 2025. Regardless of what changes may come, our 11,000 members statewide remained dedicated to preserving, protecting and advancing the right to real property for all Arkansans.

Editor’s note: Andrea Alford is the CEO of the Arkansas Realtors Association. She previously was the Arkansas Real Estate Commission executive director. The opinions expressed are those of the author.