Arkansas Is Winning in Affordability and Homebuilding: Can Gov. Sanders Keep It Going?

Arkansas continues to punch above its weight in housing affordability and new construction.

The state earned a B on the Realtor.com® State-by-State Housing Report Card, part of the Let America Build campaign that tracks how well states are meeting the challenge of building more homes while keeping costs in check.

But this isn't the case in most of the country. In fact, President Donald Trump recently put pressure on large homebuilders to increase construction nationwide. In a post on his Truth Social platform in early October, he accused major builders of hoarding lots to prop up prices — likening them to OPEC, which restricts oil output to maintain high prices.

“They’re my friends … but now, they can get Financing, and they have to start building Homes. They’re sitting on 2 Million empty lots, A RECORD,” Trump wrote. He urged Fannie Mae and Freddie Mac to intervene and “get Big Homebuilders going” in order to “restore the American Dream.” 

Arkansas’s strong showing reflects a steady construction pipeline and some of the most accessible home prices in the nation. How are they pulling it off—and what can the rest of the country learn from their success?

A leader in affordability

Arkansas earned a total score of 65.2, placing it in the top tier of the national rankings. The state’s median listing price of $296,829 is among the lowest in the country, while its median household income of $59,274 gives buyers far more purchasing power than in most markets. The Realtor Affordability Score came in at 0.74, indicating that a healthy share of listings remain affordable to middle-income earners.

Builders are keeping up, too. Arkansas accounted for 0.9% of the nation’s new home permits in 2024, roughly matching its 0.9% share of the U.S. population—a sign of balanced supply.

The new construction premium, or the difference between new and existing home prices, was 41.5%, reflecting strong demand for new builds but also a continued focus on higher-quality inventory.

Regional context

According to the recent Realtor.com New Construction Insights, the South dominates the U.S. housing landscape, with more new listings coming online there than in any other region. The median price for new construction nationally was $450,797, nearly flat year over year, while existing home prices rose 2.4%. This trend helped drive the national new construction premium down to 7.8%, the lowest on record.

“America is short more than 4.7 million homes, and every new home built helps close that gap while fueling local economies," says Shannon McGahn, executive vice president and chief advocacy officer at the National Association of Realtors®.

"NAR research shows that the U.S. has faced a persistent housing shortage for more than a decade, driving up prices and limiting options for buyers. Expanding housing supply creates jobs, supports small businesses, and affords families the opportunity to build generational wealth.”

The Realtor.com report highlights that the South’s abundance of new listings has helped stabilize prices even as demand stays strong. With steady permitting activity and relatively low land costs, Arkansas sits comfortably among the region’s strongest performers. Its affordability advantage also positions it to attract first-time buyers and out-of-state movers looking for attainable options.

Governor Sanders aims to expand workforce housing

In an effort to keep the state affordable and attractive to developers, Governor Sarah Huckabee Sanders passed one of the strongest accessory dwelling unit (ADU) laws in the country.

Act 313, which was signed by Governor Sanders in July, allows for every residential property to include at least one ADU by right on residential lots. This can include the right to build small, self-contained homes like backyard cottages and garage apartments

Municipalities are now barred from imposing many of the barriers that stifle this type of infill including no extra parking mandates, no owner-occupancy restrictions, no strict rules governing design, and no excessive fees.

Application fees are capped at $250, helping to keep the process affordable. While local governments can still regulate short-term rentals and enforce safety codes, they can no longer block these homes from being built outright.

A model for sustainable growth

The National Association of Home Builders’ Blueprint to Address the Housing Affordability Crisis outlines many of the same strategies Arkansas is pursuing: reducing regulations, expanding training for skilled trades, and improving access to financing. NAHB argues that “building more attainable, affordable housing” is the only way to keep inflation and home costs under control.

Arkansas’s B grade suggests it’s getting that balance right. By maintaining a steady pace of construction and focusing on homes within reach of working families, the state has built a foundation that other regions could learn from.

This article was produced with editorial input from Dina Sartore-Bodo and Gabriella Iannetta.