Little Rock, Arkansas Home Affordability

The data below measures home affordability for the Little Rock-North Little Rock-Conway, Arkansas metropolitan area using price-to-income and price-to-rent metrics.¹ The maximum affordable loan amount for the median household income is also calculated. You can also compare Little Rock home affordability to other cities.

Little Rock, Arkansas Home Price-to-Income Ratios

The current price-to-income ratio for Little Rock is 2.87 as determined by December 2011 Realtor median sales prices. The second chart shows a history of the ratio as an index calculated from the Federal Housing Finance Agency's Little Rock HPI series. Median household income data for Little Rock is from the Census American Community Survey.

Price-to-Income Dollar Ratio: Realtor

Price-to-Income Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Little Rock, Arkansas Home Price-to-Income Ratio History

Date	Realtor (Dollar Ratio)	FHFA (Index Ratio)
December 2011	2.87	—
September 2011	2.79	118.8
June 2011	2.85	117.6
March 2011	2.78	117.1
December 2010	2.88	118.7
September 2010	2.88	119.3
June 2010	2.88	119.9
March 2010	2.88	118.2
December 2009	2.87	119.1

Little Rock, Arkansas Home Price-to-Rent Ratios

The current adjusted price-to-rent ratio for Little Rock is 16.82 as determined by December 2011 Realtor median sales prices. This ratio is calculated using household size adjusted median contract rent for Little Rock. The chart below shows an index of the rent ratio calculated from the metro FHFA HPI series and the Little Rock median contract rent data from the Census ACS.

Price-to-Rent Dollar Ratio: Realtor, Realtor Adjusted Rent

Price-to-Rent Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Little Rock, Arkansas Home Price-to-Rent Ratio History

Date	Realtor (Dollar Ratio)	Realtor Adjusted (Dollar Ratio)	FHFA (Index Ratio)
December 2011	19.81	16.82	—
September 2011	19.24	16.34	103.7
June 2011	19.62	16.66	102.7
March 2011	19.14	16.25	102.2
December 2010	19.86	16.86	103.5
September 2010	19.86	16.86	104.1
June 2010	19.86	16.86	104.6
March 2010	19.86	16.86	103.1
December 2009	20.53	17.43	108.0

Little Rock, Arkansas Home Rent-to-Mortgage Payment Ratio

The rent-to-mortgage payment ratio uses the adjusted rent for Little Rock against a 100% loan-to-value mortgage (30-year fixed) for the median price home using Realtor home sales statistics. It's a lot like a cap rate, but I find it more appealing in ratio form. A ratio of 1.0 means that annual rent is equivalent annual mortgage payments. Values less than 1.0 indicate rents are cheaper and values greater than 1.0 mean mortgage payments are cheaper. Beware, taxes are not considered here. The rent-to-mortgage payment ratio for Little Rock was 1.04 in December 2011.

Rent-to-Mortgage Payment Dollar Ratio: Realtor

Little Rock, Arkansas Home Rent-to-Mortgage Payment Ratio History

Date	Realtor Adjusted Rent (Dollar Ratio)
December 2011	1.04
September 2011	1.05
June 2011	0.99
March 2011	0.97
December 2010	0.95
September 2010	0.99
June 2010	0.95
March 2010	0.92
December 2009	0.90

Little Rock, Arkansas Inferred Affordable Mortgage

The inferred affordable mortgage value is determined by taking the median household income for Little Rock, 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 ACS median household income and average monthly mortgage rates.

Inferred Affordable Mortgage

Little Rock, Arkansas Inferred Affordable Mortgage History

Date	Inferred Mortgage
November 2011	$241,124
October 2011	$238,810
September 2011	$237,665
August 2011	$233,167
July 2011	$225,596
June 2011	$226,655
May 2011	$223,240
April 2011	$218,138
March 2011	$218,138
February 2011	$215,406
January 2011	$220,157
December 2010	$221,434
November 2010	$232,338