Fayetteville without enough affordable housing

For local real estate experts, the affordable housing problem in Fayetteville, Arkansas is becoming more critical every day, because recent increases in property taxes, rising homeowner insurance costs, and high interest rates make it much more difficult for middle- and low-income families to access homeownership.

According to a study conducted by the city administration, it concluded that in recent years, the median home sales price in Fayetteville has increased significantly, making it harder to find affordable homes. For its results, population growth over the past 10 years and the number of new homes were evaluated, and it was determined that housing is very limited for the current population, leading to a tight real estate market.

Another influential factor, besides the low inventory of homes, is the low wages, which lead to greater restrictions when buying a home and create a big problem for sellers due to low demand. All of these factors cause financial strain, creating a gap between housing supply and demand.

Due to the inability to afford a home, residents have to resort to renting, which comes with very high prices and leads to more financial difficulties when trying to buy their own home. What the study found was that if a person with a low salary spends more than one-third of their income on rent or a mortgage, they are overextending themselves and, as a result, will fall behind on rent payments or default on their mortgage.

In light of this situation, several specialists have spoken out. One of them was Rachel Englehart, a real estate broker and investment specialist in Fayetteville, who said: “Even though down payment assistance programs help families use grant money to buy homes, making homeownership more accessible for low- and middle-income families, it would be more beneficial to see tax exemptions for first-time homebuyers or for those purchasing affordable homes, but currently, due to taxes and insurance, it’s hard for anyone to buy a home here.”

She also emphasized that property taxes, insurance, and interest rates can increase a mortgage payment from $500 to $1,000 a month, all payments that make an affordable home unaffordable for low-income families. Therefore, when supply is low and demand is high, property prices rise due to the few options available in the real estate market.

All these situations make residents prefer to rent a home rather than buy one. However, there is another important reason why the city of Fayetteville currently has a high rate of factors like renting, and that is that many renters are military personnel who, in addition to receiving housing allowances, are transient residents.

A good solution to improve Fayetteville’s lack of affordable housing, experts say, would be for the administration to conduct a study on unused or vacant municipally or publicly owned land and determine if it can be auctioned off or included in an incentive package for builders, where they could develop new properties, which would ultimately benefit consumers by making housing more affordable.

Available Foreclosures:

Fayetteville: 120 homes available.

By Elias DaSilva | September 24, 2024.