Department of Numbers

Arkansas Home Affordability

The data below quantifies Arkansas home affordability by using home prices and home price indices to calculate price-to-income and price-to-rent ratios.1 The maximum affordable loan amount for the median household income is also calculated. You can also compare Arkansas home affordability to other states.

Arkansas Home Price-to-Income Ratios

The home price-to-income ratio for Arkansas comes from the Federal Housing Finance Agency's relatively new state median price series and their purchase only index combined with Arkansas annual median household income data. The FHFA home price series yields a dollar ratio (top chart) while the index results in an index ratio (bottom chart). Based on the latest FHFA state home prices in June 2010, the price-to-income ratio for Arkansas was 3.13.

Home Price-to-Income Dollar Ratio: FHFA

Chart of Arkansas home price-to-income ratio using FHFA median price

Home Price-to-Income Index Ratio: FHFA

Chart of Arkansas home price-to-income ratio using FHFA HPI

Note: Index set to 100 in Q1 of 2000

Arkansas Home Price-to-Income Ratio History

Date FHFA
(Dollar Ratio)
FHFA
(Index Ratio)
December 2013 103.2
September 2013 105.2
June 2013 104.8
March 2013 104.2
December 2012 102.6
September 2012 101.6
June 2012 101.9
March 2012 99.8
December 2011 94.5
September 2011 92.2

Arkansas Home Price-to-Rent Ratios

The price-to-rent ratio for Arkansas is determined for both the FHFA median price and the purchase only index by calculating a ratio with the median contract rent. The price-to-adjusted rent value takes into account CPS reported household size to attempt to correct for quality differences in renter and owner occupied homes. More on that process here. Again, the median price ratio is a dollar ratio and the HPI ratio is an index ratio defined to be 100 in Q1 2000. The adjusted price-to-rent ratio for Arkansas was 20.97 in June 2010.

Home Price-to-Rent Dollar Ratio: FHFA, FHFA Adjusted Rent

Chart of Arkansas home price-to-rent ratio using FHFA median price

Home Price-to-Rent Index Ratio: FHFA

Chart of Arkansas home price-to-rent ratio using FHFA HPI

Note: Index set to 100 in Q1 of 2000

Arkansas Home Price-to-Rent Ratio History

Date FHFA
(Dollar Ratio)
FHFA Adjusted
(Dollar Ratio)
FHFA
(Index Ratio)
December 2013 100.2
September 2013 102.3
June 2013 101.9
March 2013 101.2
December 2012 99.7
September 2012 98.8
June 2012 99.0
March 2012 97.0
December 2011 99.9

Arkansas Inferred Affordable Mortgage

The inferred affordable mortgage is determined by taking the median household income for Arkansas and calculating the mortgage 30% of that income could afford. Traditionally, 30% of income is the maximum amount a homeowner could use towards a home loan. Inferred affordable loan values are calculated from median household income and average monthly mortgage rates. The amounts are not adjusted for inflation.

Inferred Affordable Mortgage

Chart of Arkansas maximum affordable home loan amount

Arkansas Inferred Affordable Mortgage History

Date Inferred Mortgage
February 2014 $197,112
January 2014 $194,107
December 2013 $193,423
November 2013 $198,051
October 2013 $199,710
September 2013 $192,742
August 2013 $193,423
July 2013 $195,485
June 2013 $202,603
May 2013 $216,152
April 2013 $218,585
March 2013 $215,350
February 2013 $216,421

1. Specifically, Home prices are from the FHFA seasonally adjusted, purchase only quarterly series. Rent data is from the Census ACS and income is from the Census CPS. Rent and income data for the previous year is carried into the following year for calculations prior to release of new data.