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Hot Springs, Arkansas: Rising Home Values and Ownership in the City of Thermal Springs
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Hot Springs, Arkansas, renowned for its natural thermal springs and historic bathhouses, has experienced notable shifts in its housing market over the past decade. The city, with a population of 48,604 in 2022, has seen a general trend of increasing homeownership rates alongside rising average home prices and fluctuating average rent prices.
The homeownership rate in Hot Springs has shown a steady increase from 57% in 2014 to 61% in 2022. This upward trend correlates with the rise in average home prices, which grew from $130,910 in 2014 to $227,322 in 2022, representing a significant 73.6% increase over eight years. The most substantial year-over-year increase occurred between 2020 and 2021, with average home prices jumping from $162,385 to $194,232, a 19.6% surge.
Federal interest rates have played a crucial role in shaping homeownership trends in Hot Springs. The period from 2010 to 2015 saw historically low interest rates, hovering around 0.1% to 0.18%. This favorable financing environment likely contributed to the stability in homeownership rates during that time. As interest rates began to rise gradually from 2016 onwards, reaching 1.68% in 2022, the homeownership rate in Hot Springs continued to increase, suggesting other factors such as local economic conditions may have had a stronger influence on homeownership decisions.
Renter percentages in Hot Springs have inversely mirrored the homeownership trend, decreasing from 43% in 2014 to 39% in 2022. Despite this decline, average rent prices have shown an overall upward trajectory. The average rent increased from $769 in 2014 to $793 in 2022, with some fluctuations in between. Notably, there was a significant jump in average rent from $831 in 2020 to $854 in 2021, possibly reflecting increased demand or changes in the rental market dynamics during the pandemic period.
Looking at the most recent data, the average home price in Hot Springs reached $237,035 in 2023 and further increased to $243,367 in 2024. This continued upward trend in home prices occurred despite a sharp rise in federal interest rates, which climbed to 5.02% in 2023 and 5.33% in 2024. These higher interest rates may impact future homeownership rates and market dynamics.
Applying predictive models to forecast five-year trends, we anticipate that average home prices in Hot Springs will continue to rise, albeit at a potentially slower rate due to higher interest rates. By 2029, average home prices could reach approximately $280,000 to $300,000, assuming a moderate annual growth rate of 3-4%. Average rent prices are also expected to increase, potentially reaching $900-$950 per month by 2029, reflecting a steady annual growth of 2-3%.
In summary, Hot Springs has demonstrated a robust housing market with increasing homeownership rates and rising average home prices over the past decade. The inverse relationship between homeownership and renter percentages, coupled with the overall increase in both home prices and rents, suggests a dynamic and evolving housing landscape. The recent sharp increase in interest rates may introduce new challenges and opportunities in the coming years, potentially affecting affordability and market dynamics in this historic Arkansas city.
