Housing prices are on the rise in Arkansas and uncharacteristically are outpacing the national rate. A report released Tuesday from the Federal Housing Finance Agency shows Arkansas house prices rose 1.6 percent compared to the national rate of 1.4 percent.
Michael Pakko, the Chief Economist and Economic Forecaster with the University of Arkansas at Little Rock's Institute for Economic Advancement, said Arkansas eclipsing the national rate of appreciation is not typical but that's not necessarily a bad sign.
Arkansas’s housing market has usually faired better than national averages since prices began a rapid decline in 2007 so there’s been less ground to make up.
“It’s not surprising that house prices are appreciating more slowly in Arkansas than the rest of the nation. Generally speaking house prices are rebounding most strongly in those areas that saw the largest price declines from 2007 to 2011 and Arkansas generally did not see as large as price declines during the crash and hence we haven’t seen as much of a rebound during the recovery,” said Pakko.
In 2013 Arkansas prices rose less than a percent each quarter while nationwide rates averaged 7 percent. Pakko said even though the gains might not be dramatic they are sign of an economy continuing an encouraging trajectory.
“It’s really an important indicator at this point in the maturing economic recovery that we see house prices rebounding. It’s both a symptom of higher demand a precursor to even stronger growth,” said Pakko.
Pakko said the rise in housing price signals potential growth for construction which has lagged behind other sectors in recent years.
The report shows Northwest Arkansas experiencing a significant rise in prices. The area was also hit worse than most other parts of the state. Little Rock’s prices have remained relatively even while Texarkana is experiencing some the biggest gains in home value.