Is Renting in Little Rock Costing You More Than a Mortgage?

Most renters in Little Rock are waiting for mortgage rates to drop before they consider buying. What they are not calculating is what that wait is actually costing them every month. Jerry Larkowski, Managing Broker at ESQ. Realty Group, LLC in Little Rock, a dual-licensed attorney and broker, works with first-time buyers and long-term renters who are on the fence. His answer to the rate question is direct: “When you rent, you’re basically paying 100 percent interest every month. You are building up no equity. You are not paying down any principal.”

A mortgage payment splits between interest and principal. The interest portion is higher in the early years, but some of every payment reduces what you owe. The home may also be appreciating. Both of those things are working in the buyer’s favor. When you rent, none of that applies. The full payment goes to the landlord. Nothing accrues. There is no asset at the end of five years or twenty years. There is just the total of every check you wrote. Larkowski puts it plainly: if a landlord is paying $1,100 a month on their mortgage and charging $1,500 in rent, the tenant is covering that note and generating cash flow for the owner. “You’re already buying a house,” he says. “You’re buying it for your landlord.”

The comparison renters make is almost always the same. A coworker or family member bought at 3.5 percent a few years ago. Current rates are in the mid-to-high sixes. The gap feels like a reason to wait. What that comparison misses is that the person who bought at 3.5 percent also bought a house. The person still waiting does not own anything. Interest rates are not something an individual buyer controls. What a buyer does control is when they stop paying someone else’s mortgage.

Larkowski’s rule is counterintuitive but straightforward: buy when prices are low and interest rates are high. “You can never change the price you pay for a house,” he says. “You can always change the interest rate.” If rates fall after you buy, you refinance. Your payment drops. You keep the lower purchase price you locked in before the market got competitive again. If rates stay the same, you made a reasonable decision at a fair price. If rates go higher, you came out ahead of everyone who waited. The only scenario where waiting clearly wins is one where prices drop significantly at the same time rates fall. In a market like Central Arkansas, where values are historically stable, that combination is not something most buyers should count on.

Inventory has been sitting longer than it did a year or two ago. That is not a sign of distress. It reflects softer demand, and for buyers it means more choices and less pressure to decide in a weekend. Quality single-family homes in Little Rock are still available at price points where a mortgage payment is competitive with what many renters are already paying. Arkansas has some of the lowest property taxes in the country, which keeps the total monthly cost of ownership lower than most people expect. A fixed mortgage payment also does something rent never will: it stays the same. In ten years, the buyer who purchased in 2026 is paying the same principal and interest they locked in at closing. The renter is paying whatever their landlord decides to charge.

For anyone who has been renting in Little Rock and is genuinely considering whether now is the time to buy, the question worth asking is not whether the rate is ideal. It is whether the current monthly payment is building anything for you. More information on available properties is on the ESQ. Realty Group active listings page.