Median home: $195,000 | Mortgage rate: 7.1% | Property tax: 0.61% | Insurance: $1,700/yr
Arkansas is one of the most affordable states in the nation. With a median home price of $195,000 and mortgage rates averaging 7.1%, understanding what you can afford before house hunting is essential.
The 28/36 rule is the gold standard: spend no more than 28% of gross income on housing and no more than 36% on total debt. In Arkansas, with a property tax rate of 0.61% and average insurance of $1,700/year, these costs add significantly to your monthly payment beyond just principal and interest.
A 20% down payment on the median Arkansas home requires $39,000. FHA loans with 3.5% down need just $6,825, but you will pay mortgage insurance. Arkansas offers a homestead tax credit that reduces assessed value by up to $375.
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Based on the 28/36 rule, your total housing payment should not exceed 28% of gross monthly income, and total debts should stay under 36%. In Arkansas, with median home prices at $195,000, you typically need a household income of at least $195,000 to afford the median home.
To afford the median Arkansas home at $195,000 with 20% down at 7.1% interest, you need approximately $44,930 annual household income. This is based on the 28% housing cost guideline.
The median home price in Arkansas is approximately $195,000 as of 2026. Prices vary significantly by city and county. Arkansas is one of the most affordable states in the nation.
A 20% down payment on the median Arkansas home ($195,000) is $39,000. FHA loans allow 3.5% down ($6,825) and VA loans offer 0% down for eligible veterans.
Arkansas has a property tax rate of 0.61%, which is below the national average. On the median home, that is $1,190/year. Arkansas offers a homestead tax credit that reduces assessed value by up to $375.