Most renters in Little Rock are waiting for mortgage rates to drop before they consider buying. But according to Jerry Larkowski, managing broker at ESQ. Realty Group, LLC in Little Rock, that wait may be costing them more than they realize. Larkowski, a dual-licensed attorney and broker who works with first-time buyers and long-term renters, says the decision to rent instead of buy has a clear downside.
“When you rent, you’re basically paying 100 percent interest every month,” Larkowski said. “You are building up no equity. You are not paying down any principal.”
Every dollar of rent goes to someone else. A mortgage payment splits between interest and principal. While the interest portion is higher in the early years, some of every payment reduces what you owe. The home may also be appreciating, both factors working in the buyer’s favor. When you rent, none of that applies. The full payment goes to the landlord, and there is no asset at the end of five or twenty years.
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.”
Waiting for rates to drop is its own gamble. Renters often compare current rates, in the mid-to-high sixes, to the 3.5 percent rates available a few years ago. But that comparison misses the fact 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, and 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 in Little Rock has been sitting longer than it did a year or two ago. That is not a sign of distress but reflects softer demand, giving buyers more choices and less pressure to decide quickly. 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 but whether the current monthly payment is building anything for them.
More information on available properties is on the ESQ. Realty Group active listings page.
