Rising Home Values and Ownership Trends in The Heights: A Decade of Growth in Little Rock's Historic Neighborhood
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
DATA SOURCE
The Heights neighborhood in Little Rock, Arkansas, is a vibrant community known for its historic charm and tree-lined streets. This affluent area has seen significant changes in homeownership rates and property values over the past decade, reflecting broader economic trends and local market dynamics. Homeownership in the Heights has shown a general upward trend, with some fluctuations. In 2013, the homeownership rate was 63%, which increased to 70% by 2022. This rise in homeownership coincided with a substantial increase in average home prices. In 2013, the average home price was $376,633, which steadily climbed to $585,744 by 2022, representing a 55.5% increase over nine years. This trend suggests a strong correlation between rising property values and increasing homeownership rates in the neighborhood.
The relationship between federal interest rates and homeownership rates in the Heights reveals interesting patterns. From 2013 to 2016, when interest rates were historically low (ranging from 0.11% to 0.40%), homeownership rates increased from 63% to 66%. As interest rates began to rise more significantly from 2017 onwards, homeownership rates initially dipped to 61% in 2017 but then rebounded, reaching 70% by 2022 despite higher interest rates. This suggests that while low interest rates generally encourage homeownership, other factors such as local market conditions and neighborhood desirability also play crucial roles in the Heights.
Renter percentages in the Heights have generally decreased as homeownership rates increased. In 2013, 37% of residents were renters, which decreased to 30% by 2022. Interestingly, average rent prices have shown an overall upward trend despite the declining percentage of renters. The average rent increased from $1,154 in 2013 to $1,196 in 2022, a 3.6% rise. This trend indicates that even with fewer renters, the demand for rental properties in the Heights remains strong, possibly due to the neighborhood's desirability and the overall population growth from 7,155 in 2013 to 7,996 in 2022.
Looking at the most recent data, the average home price in the Heights continued its upward trajectory, reaching $609,568 in 2023 and $647,930 in 2024. This represents a significant 10.6% increase from 2022 to 2024. Concurrently, federal interest rates have risen sharply, reaching 5.02% in 2023 and 5.33% in 2024. These high interest rates, coupled with rising home prices, may present challenges for potential homebuyers in the coming years.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in the Heights will continue to rise, potentially reaching around $750,000 by 2029. This projection is based on the consistent upward trend observed over the past decade and the neighborhood's continued desirability. Average rent prices are also expected to increase, possibly reaching $1,300-$1,400 per month by 2029, reflecting the ongoing demand for rental properties in this sought-after area.
In summary, the Heights neighborhood has experienced a significant increase in homeownership rates and property values over the past decade. The area has shown resilience in maintaining high homeownership rates even in the face of rising interest rates, indicating strong local demand. The rental market, while shrinking in proportion, has seen modest price increases, suggesting sustained attractiveness for both homeowners and renters. As we look to the future, the Heights is poised to continue its trajectory as a highly desirable residential area in Little Rock, with both home prices and rents likely to continue their upward trend.
