Strong Job and Population Growth and Balanced Housing Market Conditions in the Fayetteville HMA

Strong Job and Population Growth and Balanced Housing Market Conditions in the Fayetteville HMA

HUD's Comprehensive Housing Market Analyses provide information on changes in local economies, housing markets, and populations and provide 3-year forecasts for demand in the area. This article is part of a series that sheds light on the content of these analyses. 

The Fayetteville-Springdale-Rogers (hereafter, Fayetteville) Housing Market Area (HMA) includes Benton, Madison, and Washington counties in northwest Arkansas. The HMA, in the Ozark Mountains, is coterminous with the Fayetteville-Springdale-Rogers, AR Metropolitan Statistical Area (MSA). The Fayetteville HMA is the second-largest MSA in the state of Arkansas, following the Little Rock-North Little Rock-Conway MSA, and it is also the state's fastest-growing MSA. From 2020 to 2024, the Fayetteville MSA was among the 20 fastest-growing metropolitan areas in the nation (U.S. Census Bureau decennial census counts; population estimates as of July 1). The current population of the Fayetteville MSA is estimated at 617,900, an average annual increase of 14,250, or 2.5 percent, since 2020. During this period, net in-migration has averaged 11,400 people annually, accounting for 80 percent of all population growth. By comparison, from 2010 to 2020, the HMA's population increased by an average of 10,650, or 2.2 percent annually, with net in-migration averaging 7,125 people annually. A recent Comprehensive Housing Market Analysis highlighted the Fayetteville-Springdale-Rogers HMA and reflects local conditions as of April 1, 2025.

Job growth in the Fayetteville-Springdale-Rogers HMA has outpaced the national rate of job growth since 2011.

Economic conditions in the Fayetteville HMA are strong, with job growth exceeding the national average since 2011. During this period, nonfarm payrolls in the Fayetteville HMA increased by an average of 3.3 percent annually, more than double the national average rate of 1.4 percent annually. During the 12 months ending March 2025, nonfarm payrolls in the Fayetteville HMA increased 2.7 percent.

The Fayetteville HMA includes the headquarters of three Fortune 500 companies: Walmart Inc. (Walmart); Tyson Foods, Inc. (Tyson); and J.B. Hunt Transport Services, Inc. (J.B. Hunt). Walmart is ranked first on the 2025 Fortune 500 list and is the largest company in the world in terms of revenue; Tyson and J.B. Hunt are ranked 85th and 348th, respectively. Among MSAs with a population of less than 1 million, the Fayetteville HMA is the only one boasting a company ranked in the top 20 of the Fortune 500 and two companies in the top 100. Walmart is the world's largest retailer with a global workforce of 2.13 million, of which 29,600 are in the HMA; 15,000 of those employees work at the corporate headquarters in the city of Bentonville in Benton County. In addition, an estimated 1,600 Walmart suppliers with a combined local workforce estimated at more than 10,000 have corporate offices in the HMA. Many of those firms maintain a small staff to coordinate their work with Walmart, but others have a larger local presence. The HMA is also home to the University of Arkansas, which has 5,400 employees and 33,600 students as of fall 2024 and has an estimated $1.4 billion in economic impact on the HMA annually (University of Arkansas).

Due in part to this significant corporate presence, the professional and business services sector is the largest employment sector in the Fayetteville HMA, with 60,700 nonfarm payroll jobs accounting for nearly 20 percent of all nonfarm payroll jobs in the HMA. The government sector led job growth during the 12 months ending March 2025, increasing by 1,800 jobs, or 4.3 percent, to 43,600 jobs; it surpassed wholesale and retail trade to become the second-largest payroll sector in the HMA. Most job gains in this sector were in the state government subsector, which increased by 1,400 jobs, or 7.2 percent, thanks to continued expansion at the University of Arkansas for Medical Sciences. During the same period, and on a percentage basis, the mining, logging, and construction sector experienced the fastest increase in job growth at 8.4 percent, or 1,400 jobs. The ongoing construction of a new Walmart corporate campus, the largest construction project in the HMA, is nearing completion, with the first of 22 buildings on the campus opening in 2025. 

During the 3-year forecast period, job growth in the HMA is expected to be strong, averaging 2.3 percent annually with gains in most nonfarm payroll sectors. Several recent announcements are expected to contribute to job growth. Key Tronic Corporation, a precision manufacturing company, is expanding its facility in the city of Springdale and will add 400 jobs when the project is completed in 2028. The Arkansas Children's Northwest Hospital is undergoing a $318 million expansion and will contribute to job growth in the education and health services sector when complete in late 2025; in addition, rising demand for health care due to continued population growth will fuel additional growth in this sector. Although Walmart will continue to exert an outsized influence on the HMA and contribute to job growth during the forecast period, the completion of the corporate campus will slow the pace of job growth in the mining, logging, and construction sector. 

Strong job and population growth in the Fayetteville HMA keep home sales demand strong, while record levels of apartment deliveries during the past 12 months have driven up the average apartment vacancy rate. 

The home sales market in the Fayetteville HMA is balanced, with an estimated vacancy rate of 1.7 percent — unchanged from April 2020, when conditions also were balanced. Home sales peaked during the 12 months ending March 2022 but increasing mortgage interest rates have diminished sales demand. The inventory of homes for sale remains low, because many sellers are reluctant to finance a new home at a higher rate than their current home. As of March 2025, the HMA had a 2.6-month supply of for-sale inventory, up from 2.3 months during April 2020 but well below the 12.8 months of inventory during April 2010 (Cotality). Home sales during the 12 months ending March 2025 began increasing again following sales declines during the previous 24 months. During the 12 months ending March 2025, home sales increased more than 5 percent to 12,325 compared with a 14 percent decline a year earlier. During the same period, the average home sales price increased nearly 3 percent to $398,600. Sales construction activity has remained strong, and the number of units permitted has exceeded 5,500 every year since 2021. During the 12 months ending March 2025, 5,650 new homes were permitted, up nearly 2 percent from the previous 12 months. During the next 3 years, demand is estimated for 13,800 new homes. 

The rental housing market in the Fayetteville HMA is balanced, with an estimated vacancy rate of 8.6 percent. The rental market vacancy rate has increased from 7.5 percent in 2020 because of a recent surge in the number of rental units entering the market. Apartment market conditions also are balanced, with an overall vacancy rate of 8.9 percent as of the first quarter of 2025, up from 8.5 percent a year earlier (CoStar Group). The overall apartment vacancy rate, including units in lease up, increased slightly as of the first quarter of 2025 because the number of units delivered outpaced the increased level of absorption. During the 12 months ending March 2025, developers delivered 2,250 apartment units in the HMA, an increase of 700 units, or 45 percent, from the previous 12 months, whereas absorption of apartments during the 12 months ending March 2025 totaled 1,500 units, more than double the 600 units absorbed during the previous 12 months. The average rent for an apartment in the HMA as of the first quarter of 2025 was $1,180, up by $32, or 3 percent, from the first quarter of 2024, when rent growth was 2 percent. The pace of rent growth in the HMA has slowed significantly during the past 24 months compared with the preceding 24 months, when rent growth averaged 8 percent annually, which was the strongest period of rent growth in the HMA in at least 15 years. Construction of new rental units has surged recently to accommodate the HMA's significant population growth. During the 12 months ending March 2025, the construction of rental units reached a new high of 4,175 rental units permitted, up by 1,075 units, or more than 34 percent, from the previous 12 months. By comparison, from 2018 through 2022, the number of rental units permitted annually averaged 2,450, which marked a significant increase from the average of 800 units annually from 2010 through 2017. During the 3-year forecast period, demand is estimated for 6,850 rental units. The 5,100 rental units under construction will satisfy a large portion of this demand.