NWA delivers growth, opportunity in 2026

The real estate market characteristics of the early 2020s grow smaller and smaller in the rear-view mirror. For those early years we experienced an unforgettable market.

But we should forget it.

Comparison is a thief. And in this case, it robs us of perspective. Instead of judging where we are today compared to a few years ago, let’s quickly zoom out and take a look at the last 10 years.

Between 2016 and 2019, Benton and Washington counties averaged just over 10,000 residential sales annually while having an average of about 2,400 homes available for sale at any time. That’s under a three-month supply of inventory, making this period a healthy seller’s market that led to 4%-6% annual average sales price growth. Mortgage rates averaged 4% then.

From 2020 to 2022, we saw thousands more homes sold in Benton and Washington counties than in prior years, with over 12,000 sold in both 2020 and 2021. We had an unprecedentedly low number of homes available to purchase, averaging about 1,000 at any given time – about 60% less than normal.

Inventory dipped to fewer than 500 homes at one point, about 2 weeks’ worth, an extreme seller’s market. This led to unprecedented 10%-20% annual price growth fueled by historically low interest rates. From 2020 to 2021, rates were about 3% or below at times, then rose sharply in 2022 to over 7%.

From 2023 to 2024 was a transitional period. Home sales returned to pre-2020 levels, averaging about 10,000 annually in Benton and Washington counties.

Inventories rose sharply and peaked around 2,200 homes available for sale, much closer to a balanced buyer/seller market but still technically a seller’s market. Home prices continued to increase but at a healthier 3%-5%. Mortgage rates climbed to just under 8%.

In 2025, Benton and Washington counties saw 10,588 residential sales, flat from 2024. Inventories continued to rise, peaking at 3,200 homes available for purchase. Overall, 2025 maintained seller’s market status but inched closer to balanced market conditions. While nationally some markets saw home prices slide, Northwest Arkansas saw average sales prices increase 7%. The affordability of homes dominated headlines as prices continued to rise and mortgage rates remained high, averaging 6.6% for the year. However, by year-end, rates had steadily fallen, dipping under 6% and boosting buyer momentum.

What to expect in 2026. After a roller coaster of rate volatility over the past three years, expect mortgage rates to stay flat for 2026. Forecasts show the average rate hovering between 5% and 6% for the year. Compared with 2023-2025, when rates averaged 6.5%-7%, homebuyers should feel some improvement in affordability.

Following suit with 2025, we should see the inventory of homes for sale increase this year. Nationally, inventories are expected to increase about 10%; however, unlike past years, this will vary greatly by market this year. In Northwest Arkansas we’ve already seen inventories increase, but I expect that to tighten later in 2026 and into 2027 due to constraints of current public infrastructure creating more questions than answers, stymying future development.

You don’t have to go far to find clickbait warning you of home prices collapsing. The reality is, from a supply and demand perspective, the real estate market is as healthy as it’s been in years. And prices will continue to increase, albeit more modestly than in previous years. National economists expect an average of 2%-3% price growth. However, Northwest Arkansas has historically outperformed national averages, so don’t be surprised to see growth of 5% or higher.

The general consensus is home sales will increase in 2026 as lower mortgage rates and increased inventory entice more buyers to the market.

The fundamentals show our NWA market is strong and, most importantly, healthy. For 2026, I see a market that is balanced, stable and predictable.

Editor’s note: Marcus Necessary is executive vice president and executive broker at Coldwell Banker Harris McHaney & Faucette in Rogers. The opinions expressed are those of the author.