[User] Mexico accounted for the greatest number of immigrants into the United States from 2010 through 2013, averaging 12 percent of all U.S. immigrants. China and India accounted for an average of 8 percent of immigrants during these years. In 2014, China (10 percent) surpassed Mexico (9 percent), and in 2015, India (10 percent) surpassed China (9 percent). From 2016 through 2018, China resumed the top spot, accounting for 10 percent of all immigrants, with Mexico and India each averaging 9 percent. In 2019, the largest number of immigrants to the United States came from Mexico (10 percent), followed by China (9 percent) and India (8 percent). During 2020, numerous policies were enacted that had the effect of restricting immigration to the United States, undertaken as part of the efforts to reduce the spread of COVID-19. These policies may be relaxed once the pandemic ends. Age Cohort Trends The median age in the United States in 2019 was 38.5 years, up from 37.2 years in 2010. The largest population by age range in the United States is the 20-to-39-year-old age cohort, which Notes: Net natural change and net international migration totals are average annual totals over the time period. The forecast period is from the current date (January 1, 2021), to January 1, 2024. Sources: U.S. Population by Age Range in the Nation The under-20 age cohort declined from 26.9 percent of the population in 2010 to 24.9 percent in 2019. In addition, the 40-to-59-year-old cohort also declined, from 27.7 percent of the total population to 25.1 percent during the same period. As the baby boom generation has aged, the 60-to-79-year-old age cohort has grown substantially. In 2010, this age group made up 14.8 percent of the total population, but by 2019 it had grown to 19.0 percent of the population. This helps explain the steady growth in healthcare-related services throughout the country, as this age group tends to be a major consumer of health services. The 80-and-older age group remained relatively stable during the period, rising from 3.7 percent of the total population in 2010 to 3.9 percent in 2019. Recent Regional Population Trends From 2019 to 2020, the population increased in 8 of the 10 HUD regions. Map 4 shows the population growth rates by region. The national increase in population was 0.4 percent during that period. Four regions had a rate of population growth higher than the national average, with the highest rates of 1.0 percent in the Northwest and Southwest regions. The population in the Rocky Mountains grew by 0.9 percent, followed by the Southeast/Caribbean region at 0.8 percent. In the Pacific region, the population increased by 0.2 percent while growing by 0.1 percent in both the Great Plains and Mid- Atlantic regions. The population remained unchanged in the New England region. The population in the New York/New Jersey region declined 0.5 percent during the period and was down by 0.1 percent in the Midwest region. Household Trends The number of households in the United States is currently estimated at 127.60 million—an average annual increase of 0.8 percent, or 1.01 million households, since 2010. From 2000 to 2010, the number of households increased at a somewhat faster average annual rate of 1.0 percent, or 1.12 million households, due largely to higher population growth compared with the 2010s. Map 4. Population Growth by HUD Region, 2019–2020 Source: U.S. Census Bureau Population Estimates Program Since 2010, owner households have increased 0.7 percent a year, and renter households have increased 1.1 percent a year, compared with respective rates of 0.9 and 1.3 percent from 2000 to 2010. Owner household growth was highly variable in the 2000s, as the rate of homeownership increased significantly during the years of the housing boom. After the housing bubble burst and the economy entered the Great Recession, overall tenure distribution shifted throughout the country among households with a number of households shifting from ownership to renting. In part, that shift occurred because younger households have been delaying homeownership compared with previous generations. In absolute terms, from 2000 to 2010, the number of owner households increased by an average of per year, whereas renter households increased by a year. Since 2010, owner household As a result, the rate of owner household growth has slowed since 2010, and the homeownership rate in the country has declined to a current estimated level of 64.2 percent, down from 65.1 percent in 2010 and down from a peak of 69.0 percent in 2004. Currently, an estimated 81.88 million owner households and 45.73 million renter households reside in the United States. During the next 3 years, households are expected to increase by an average of or 0.7 percent, annually, as the rate of population growth slows. Current Conditions The national home sales market is very tight, with the months’ supply of homes dropping from 3.9 months in 2019 to 3.1 months in 2020 (NAR). As the nation entered a severe economic downturn, home sales and prices rose and the inventory of homes for sale hit a new low. In 2020, there were 1.07 million active listings—a decrease of 23 percent from 2019 levels when the market was already tight. The low number of active listings in the past 12 months was exacerbated by the challenges of showing homes during the pandemic. In 2020, year-over-year, existing home sales increased 6 percent (NAR), but new home sales increased 19 percent—the largest annual increase in new home sales since 2012 when sales were recovering from lows reached during the housing crisis (Census Bureau/HUD). Home prices also rose in 2020, with the median existing home sales price increasing 9 percent to and the median new home sales price rising 4 percent to ( Seriously delinquent mortgages are those that are 90 or more days delinquent or in foreclosure. Source: CoreLogic, Inc. Seriously Delinquent Mortgages and REO Properties 180 days was mandated by the CARES Act for federally backed home loans. The borrower may request an additional 180 days for a total forbearance period of 360 days. In February 2021, further extensions of mortgage forbearance between 3 to 6 months were announced for federally backed home loans. Approximately 70 percent of mortgages nationwide are federally backed and qualify for mortgage forbearance as outlined in the CARES Act (Urban Institute). As of April an estimated 3.85 million borrowers representing 7.3 percent of the first lien market were in an active forbearance plan; this includes 6.7 percent of fully private mortgages that are not covered by the forbearance options mandated by the CARES Act (Black Knight Financial Technology Solutions, LLC). The number of active forbearance plans increased rapidly, rising by 24 percent nearly a month later, to 4.76 million borrowers on May 26, or 9.5 percent of first lien mortgages nationwide. Since then, the number of mortgages in active forbearance plans has declined to 2.74 million borrowers, or 5.2 percent of all first lien mortgages as of January . While the number of mortgages in forbearance plans has declined since the beginning of the pandemic, Black Knight Financial Technology Solutions, LLC projects that 24 percent of the loans in active forbearance plans will reach their expiration in March 2021. The extension of mortgage forbearance options will allow some of those borrowers an extra 3 to 6 months of delaying their payments. Currently, only 12 percent Current Regional Highlights The sales housing markets in the 10 HUD regions had mixed conditions during the fourth quarter of 2020, ranging from slightly soft to very tight. Sales markets in the Northwest region ranged from very tight to balanced, whereas the New York/New Jersey region was the only region with slightly soft sales markets. According to the CoreLogic, Inc. home price index (HPI) for repeat sales, price appreciation was highest in the states in the New England region from December 2019 to December 2020. Four of the top 10 states in the country for price appreciation were in the New England region, with price increases ranging from 15 percent in Maine to 13 percent in Rhode Island. Home prices in the Southwest region had some of the smallest increases: the HPIs in Texas Sources: National Association of Realtors®; U.S. National Home Sales and Louisiana each increased 6 percent. No state in the country had a price appreciation of less than 6 percent in the past year. For additional home sales market data by HUD region, visit the regional housing market information page on the PD&R U.S. Housing Market Conditions website. During that period, home sales rose as mortgage lending standards were more relaxed and more mortgages were issued to riskier borrowers, which helped to inflate home sales. From 2001 through 2006, subprime and near-prime loans increased from 9 to 40 percent of all mortgage originations (U.S. Economics Analyst, Goldman Sachs). During roughly the same period, from 2001 through their peak in 2005, existing home sales increased an average of 6 percent a year, and new home sales increased an average of 8 percent a year (NAR; Census Bureau/HUD). As mortgage interest rates increased in 2006, new and existing home sales declined 18 and 8 percent, respectively, with the decrease accelerating in 2007 after the housing bubble began to burst. National Home Sales Prices For the next few years, the home sales market in the United States was extremely soft. As a result, new and existing home sales continued to decline, with existing home sales bottoming out in 2008 and new home sales bottoming out in 2011. From peak to trough, new home sales declined at an average annual rate of 8 percent, and existing home sales declined at an average annual rate of 28 percent. Since their respective lows, new and existing home sales have trended upward as the economy improved and sales market conditions tightened. Most of the sales growth from 2009 through 2019 for existing homes and from 2012 through 2019 for new homes was concentrated in the early years of the recovery. From 2009 through 2016, existing home sales increased at an average annual rate of 4 percent. From 2017 through 2019, existing home sales decreased at an average annual rate of 1 percent. New home sales followed a similar pattern, increasing at an average annual rate of 13 percent from 2012 through 2016 and slowing to an average annual rate of 7 percent from 2017 through 2019. In 2020, home sales growth accelerated to 6 percent for existing homes and 19 percent for new homes. The median existing home sales price increased an average of 8 percent a year from 2001 through the peak in 2006, whereas the median new home sales price peaked a year later, increasing an average of 6 percent a year from 2001 through 2007 (NAR; Census Bureau/HUD). Sales prices declined for both new and existing home sales in the years that followed; however, the peak-to-trough decline in existing home sales prices (25 percent) was more severe than the decline in new home sales prices (13 percent) and lasted nearly twice as long. From 2008 through 2009, the median price for new homes sold declined an average of 7 percent a year, and from 2007 through 2011, the median price for existing homes sold decreased an average of 6 percent a year. In large part, this was because the proportion of existing sales that were REO properties swelled during this time, and the relatively low prices for REO home sales created downward pressure on overall existing home sales prices. REO sales constituted a small proportion of existing home sales from 2000 through 2007, averaging around 3 percent (CoreLogic, Inc.). With the onset of the Great Recession, that percentage skyrocketed to 32 percent in 2009—a year when the average sales price for an REO home was nearly 50 percent below the price of a regular resale home. The median home sales price for new homes increased an average of 4 percent a year from 2010 through 2020. Price growth for existing homes was also steady from 2012 through 2019, with the median sales price increasing an average of 6 percent a year. However, growth accelerated to 9 percent in 2020. The total increase in home prices from trough to 2020 was 54 percent for new homes and 79 percent for existing homes. From 2000 through 2005, when home sales and prices increased, the number of sales units permitted averaged 1.55 million units a year. During the next 4 years, the number of sales units permitted dropped precipitously, averaging units permitted a year or a decline of 39 percent from the previous period. Sales building activity stabilized at low levels from 2009 through 2011, at sales units permitted annually, as the housing market worked to absorb an excess supply of Note: Includes single-family homes, townhomes, and condominiums. Sources: U.S. Average Annual Sales Permitting Activity in the Nation sales inventory. Since 2012, the number of sales units permitted has averaged annually, an increase of 66 percent from the previous period. Although this increase in sales permitting is significant, it has not kept pace with the growth in demand and has contributed to the currently tight sales market conditions. The number of sales units permitted increased 12 percent in 2020, year over year, surpassing 1 million for the first time since 2007. Despite record low mortgage interest rates in 2020, the HOI declined by 4.9 percentage points in the past year alone because of increased home sales prices and decreased household income. First-time homebuyers face many affordability challenges when it comes to purchasing a home, regardless of where they live. For the nation, homeownership has become less affordable for households in the 25-to-44-year age cohort, a prime group for first-time homebuyers. The HUD First-Time Homebuyer Affordability Index measures the median household income for householders aged 25 to 44 years old relative to the income needed to purchase the 25th percentile-priced home. In 2019, the index increased slightly to 1.9 because of low interest rates and increased household income. When 2020 data are released, it is likely that the HUD First-Time Homebuyer Affordability Index will show a decline in affordability for first-time homebuyers, in part because of the strong home price increases in the past year and weak income growth.

[Assistant] Demand for New Sales Units in the Nation During the Forecast Period Sales Units Demand Units Under Construction Units Note: The forecast period is from January 1, 2021, to January 1, 2024. Source: Estimates by the analyst Forecast Despite signs of weakness in the housing market because of increased mortgage delinquencies during the past year, the outlook for the home sales market is positive. Demand is expected for 3.28 million sales units during the 3-year forecast period (Table 4). This forecast calls for an increase in the production of sales units to ease the extremely tight housing market conditions. Less than one-half of the demand during the first year will be met by units already under construction. Given the current economic and demographic forecast, the number of homes demanded should be relatively constant through the next 3 years.


[User] Current Conditions and Recent Trends The national rental market is slightly tight, with an estimated vacancy rate of 6.2 percent—up from 6.1 percent in 2019, when the market was tight (Table 5). Sixty-two percent of the national rental supply is in multifamily structures with two or more units, typically apartment properties (2019 ACS 1-year data). Attached and detached single-family homes are also an important source of rental supply in the nation, with 33 percent of renters residing in that type of unit as of 2019, up 1 percentage point from 2010. During December 2020, the vacancy rate for professionally managed single-family rental units was 2.7 percent, up 0.1 percentage point from December 2019 (CoreLogic, Inc.). At the same time, the median rent for two-bedroom single-family homes that were professionally managed increased 7 percent, to $1,418. During a similar period, from the fourth quarter of 2019 to the fourth quarter of 2020, the average monthly effective rent for apartment units declined nearly 1 percent, whereas the apartment vacancy rate increased from 4.2 to 4.3 percent (RealPage, Inc.). A large portion of the rental supply in the nation is not captured in the aforementioned Rental Market Quick Facts 2010 (%) Current (%) Rental Vacancy Rate 9.2 6.2 Occupied Rental Units by Structure Single-Family Attached & Detached 34.0 33.0 Multifamily (2–4 Units) 19.0 17.0 Multifamily (5+ Units) 43.0 45.0 Other (Including Mobile Homes) 5.0 4.0 Current YoY Change Apartment Vacancy Rate 4.3 0.1 Average Monthly Rent $1,410 -0.6% YoY= year-over-year. Notes: The current date is January 1, 2021. Percentages may not add to 100 due to rounding. Sources: 2010 and 2019 American Community Survey, 1-year data; RealPage, Inc. Table 5. Rental and Apartment Market Quick Facts for the Nation survey data, which explains why the vacancy rates for apartments and professionally managed single- family rentals are below the current estimated vacancy rate of 6.2 percent for all rental units. It is likely that the severe economic downturn caused by the COVID-19 pandemic disproportionally harmed renter households in part because they were less secure financially before the pandemic. In addition, many renters were employed in industries hard hit by the pandemic and therefore were more likely to face job losses. In 2019, the median net worth of an owner household was 40 times the median net worth of a renter household, and the median income of an owner household was more than twice that of a renter household (Board of Governors of the Federal Reserve System, Survey of Consumer Finances). During mid-December 2020, an estimated 18 percent of all renter households were behind on their housing payment, versus 8 percent for all owner households (U.S. Census Bureau, Household Pulse Survey). At the same time, 17 percent of renter households that were not current on their rental payments thought it was very likely that they would have to leave their home because of eviction in the next 2 months. Several policies have been enacted at the federal level in the past year that have helped renters stay in their homes during the COVID-19 pandemic. The CARES Act included a 120-day moratorium on evictions and protections for tenants in certain rental properties with federal assistance or According to the Urban Institute, this covers 28 percent of rental units in the nation. In addition, state and local eviction moratoriums enacted in 2020 provided protections for a share of renters not covered by the CARES Act. Under Section 4024(b)(2) of the CARES Act, renter households living in covered dwellings were able to postpone rent payments until July without the threat of eviction or being charged fees or penalties for nonpayment of rent. After the moratorium expired, landlords were required to give a 30-day notice to evict a tenant in a covered dwelling unit, giving households until August . Following that date, an 11-day period occurred in which no eviction protection for renters existed at the federal level. On September 4, 2020, the Centers for Disease Control and Prevention (CDC) issued an order to temporarily halt residential evictions to prevent the further spread of COVID-19. While the eviction moratorium included in the CARES Act was intended to alleviate economic and public health consequences of eviction, the CDC order was focused on the public health consequences of eviction during the pandemic—a recognition of the increased risk of COVID-19 transmission associated with evictions. Like Section 4024(b)(2) of the CARES Act, the CDC order does not relieve any obligation to pay rent or make a housing payment; the order was set to expire on January but has been extended through March .

[Assistant] Meanwhile, rental debt will continue to accrue. In October 2020, the Federal Reserve Bank of Philadelphia projected that an estimated 1.34 million renter households would owe $7.2 billion in rent or approximately $5,400 each in December 2020.


[User] On December Congress passed the Consolidated Appropriations Act of 2021, which included $25 billion for the Department of Treasury to launch the Emergency Rental Assistance Program. The program, which provides funding to state and local governments, helps renter households struggling to pay rent and utilities because of the COVID-19 pandemic. Current Regional Highlights Rental market conditions varied throughout the 10 HUD regions from soft to tight during the fourth quarter of 2020. The Mid-Atlantic region was the only region containing soft markets, whereas most regions had a mix of balanced to tight markets. Year-over-year apartment rent growth during the fourth quarter of 2020 did not exhibit any pronounced trends at the regional level; however, it is worth noting that some metropolitan areas known for their high housing costs registered sharp rent declines. The average effective rent for the fourth quarter of 2020 decreased 19 percent in the San Francisco metropolitan area and 14 percent in the San Jose and New York City metropolitan areas (RealPage, Inc.). Additional rental market data by HUD region is available at the regional housing market information page on the PD&R U.S. Housing Market Conditions website. Apartment Vacancy Rates and Rents Since 2000 The national apartment market during the 2000s was more volatile than during the 2010s when there was a steady tightening of market conditions. During this period, the average monthly effective apartment rent was relatively unchanged. The rental market softened during this time because of an increased number of households shifting from renting to owning homes and an increased supply of single-family rentals that investors added to the market. The market tightened somewhat in 2005, with the vacancy rate declining by 1.2 percentage points and the average monthly effective rent increasing 3 percent. In the years that followed, the apartment vacancy rate increased by an average of 0.6 percentage point annually, and the average monthly effective rent increased an average of 1 percent a year through the fourth quarter of 2009. As was the case for the sales market during that period, the national apartment market was soft in 2009, in part because apartments faced increased competition from investor-owned condominiums and single-family homes entering the Apartment Rents and Vacancy Rates in the Nation rental market. During the housing crisis, the increase in condominium and single-family rentals came from two main sources: (1) investors buying foreclosed properties and offering them for rent and (2) households needing to relocate and move out of their homes but without enough equity to sell. In the years since the Great Recession, the average apartment vacancy rate has mostly trended downward, but the average monthly effective rent in the nation increased at a steady rate until 2020. From the fourth quarter of 2009 to the fourth quarter of 2019, the average apartment vacancy rate decreased from 8.0 to 4.2 percent, or an average of 0.4 percentage point a year. In the fourth quarter of 2020, the average apartment vacancy rate increased 0.1 percentage point to 4.3 percent (RealPage, Inc.). The average effective monthly rent increased an average of 4 percent annually, from $938 in the fourth quarter of 2009 to $1,419 in the fourth quarter of 2019 before declining 1 percent to $1,410 in the fourth quarter of 2020. Rental Construction Activity Rental building activity, as measured by the number of rental units permitted, averaged much higher levels during the 2010s in response to stronger growth in rental demand and tighter rental market conditions compared with the previous decade. As the rental market Note: Includes apartments and units intended for rental occupancy. Sources: U.S. Average Annual Rental Permitting Activity in the Nation Rental building activity began to recover in earnest in 2012 to approximately units, or more than double the average for the previous 3 years, and an average of rental units were permitted annually during the 2012-through-2014 period. Since 2015, an average of rental units have been permitted annually, increasing 10 percent from the average annual level during the previous 3 years. Housing Affordability: Rental Rental affordability across the nation increased through the 2010s, with the median income for renter households increasing at a faster rate than the median gross rent. From 2010 to 2019, the median income for renter households increased 38 percent, whereas the median gross rent increased 28 percent. It is likely that 2020 data will show a decline in rental affordability because of decreased income for renter households brought on by the pandemic. Although rental affordability improved during the 2010s, many renter households in the United States face some degree of cost burden, paying more than 30 percent of their income on rent. During the 2013-through-2017 period, an estimated 21.8 percent of all renter households in the nation were cost burdened, spending between 30 and 49 percent of their income on rent, whereas 22.9 percent were severely cost burdened, spending more than 50 percent of income toward rent ( The Gross Rent Affordability Index differs from the HUD Rental Affordability Index published on the U.S. Housing Market Conditions website in that it is based on combined rent and utilities expenditure. Gross Rent Affordability Index for the Nation Cost Burdened Severely Cost Burdened Renter Households with Income <50% HAMFI 25.6 50.1 Total Renter Households 21.8 22.9 “Cost-burdened” households spend between 30–49 percent of their income on rent, and “severely cost-burdened” households spend over 50 percent of their income on rent. Sources: Consolidated Planning/CHAS Data; American Community Survey 5-year estimates Source: Estimates by the analyst Rental Units Demand Units Under Construction Units Table 8. Demand for New Rental Units in the Nation During the Forecast Period burdens are significantly worse for very low-income renter households. For renter households with incomes less than 50 percent of the Area Median Family Income, 25.6 percent were cost burdened and 50.1 percent were severely cost burdened.

[Assistant] In addition to LIHTC, income-eligible residents may qualify for project-based rental assistance (PBRA) or housing choice vouchers (HCV) through the local public housing authority (PHA). Nationwide, PHAs administered approximately 2.3 million HCVs in 2019, an increase of more than 13 percent from 2010 (HUD’s Picture of Subsidized Households). The number of households served and the average monthly subsidy have increased by 3.9 and 0.1 percent, respectively, since 2010, whereas the monthly tenant contribution has decreased 0.5 percent (Table 7). Tenant income likely decreased in 2020 because of the COVID-19 pandemic, leading to increased subsidy and a decrease in tenant contributions. Despite nearly 4.6 million American households receiving rental assistance, funding limitations prevent three out of four eligible households from receiving housing assistance. Forecast During the 3-year forecast period, the slightly tight rental market is expected to ease as the rate of renter household growth moderates. In addition, a large number of potential evictions looms over the rental market, the effects of which are highly uncertain and may be influenced by government efforts to limit the impact. Demand for approximately 1.11 million rental units is expected nationwide for the next 3 years (Table 8). The rental units already under construction will satisfy nearly all of the estimated demand during the first year of the forecast period. Demand is expected to remain relatively constant during the 3-year period, given the economic and demographic outlook presented in this report.


[User] Total Change Since 2010 Total Assisted Households Total Housing Voucher Households Average HCV Tenant Monthly Contribution $386 -0.5% Average Monthly HUD Subsidy $834 0.1% Dollar changes are inflation adjusted using the Consumer Price Index for All Urban Consumers (CPI-U). Source: HUD Picture of Subsidized Households Cost Burdened Spending more than 30 percent of household income on housing costs. Severely Cost Burdened is spending more than 50 percent of household income on housing costs.

[Assistant] Demand The demand estimates in the analysis are not a forecast of building activity. They are the estimates of the total housing production needed to achieve a balanced market at the end of the 3-year forecast period given conditions on the as-of date of the analysis, growth, losses, and excess vacancies. The estimates do not account for units currently under construction or units in the development pipeline.


[User] Home sales prices averaged during the 12 months ending September 2021, up 12 percent from the previous 12 months, which was the fastest gain in over a decade (CoreLogic, Inc.). The inventory of homes for sale was 1.2 months, the lowest level in over a decade. Low mortgage interest rates, limited growth in new home construction since the mid-2010s, and the rise in telework in 2020, which shifted preferences in where people live and work, contributed to tight market conditions.

[Assistant] During the three-year forecast period, demand is expected for 6,025 additional homes. The 810 homes currently under construction are expected to meet a portion of that demand. To meet forecast demand, average annual construction will need to exceed the number of homes permitted during the most recent 12 months. Demand for additional rental units since 2010 has been met primarily by construction of large apartment buildings, often with 20 or more units, but construction slowed in 2018 and 2019, resulting in fewer units entering the market in recent years, despite renter household growth. The apartment market is tight, with the lowest vacancy rate in over two decades, at 2.1 percent, during the third quarter of 2021, and it had relatively rapid rent growth, up 3 percent from a year ago, compared with an average gain of 2 percent annually during the 2010s. During the 3-year forecast period, demand for an additional 8,600 units is expected. The 5,100 units under construction are expected to meet a portion of that demand. Permitting increased in 2020 and 2021 and will need to remain above 2018 and 2019 levels to meet forecast demand.


[User] Rental Market Slightly Tight: The rental market vacancy rate is currently estimated at 3.0 percent, down from 6.7 percent in 2010. Sales Market Very Tight: In response to rapidly rising home sales prices and an extremely low inventory of homes for sale, the number of sales units permitted was at the highest level in over a decade, at 1,950 homes, during the 12 months ending September 2021.

[Assistant] Units under construction as of October 1, 2021. The forecast period is October 1, 2021, to October 1, 2024. Source: Estimates by the analyst


[User] Research at UW has helped launch private sector companies in high-tech and scientific research industries and attracted companies in similar industries to the area. University Research Park, a UW-affiliated office park that opened in 1984, is currently home to more than 125 companies, with over 3,500 employees, and it had a statewide economic impact of nearly $850 million in 2015. Tenants range from large national companies, such as Exact Sciences Corporation, maker of the Cologuard cancer screening test, and Fujifilm Cellular Dynamics, Inc., to the 17 small startup companies currently housed at the Forward BIOLABS incubator. The largest locally founded tech company is Epic Systems Corporation, a digital healthcare records management company. Share of Nonfarm Payroll Jobs in the Madison HMA, by Sector Name of Employer Nonfarm Payroll Sector Number of Employees University of Wisconsin-Madison (UW) Government 22,038 UW Hospital Government 15,358 Epic Systems Corporation Professional & Business Services 9,600 SSM Health Education & Health Services 6,444 American Family Insurance Co., S.I. Financial Activities 4,427 UnityPoint Health-Meriter Education & Health Services 3,500 UW Medical Foundation Education & Health Services 3,486 WPS Health Solutions Education & Health Services 3,000 Laboratory Corporation of America Holdings Professional & Business Services 2,091 CUNA Mutual Group Financial Activities 2,000 Excludes local school districts. Sources: City of Madison, Government of Dane County Notes: Total nonfarm payroll is in thousands. Percentages may not add to 100 percent due to rounding. Based on 12-month averages through September 2021. Large global tech companies Amazon.com, Inc., Microsoft Corporation, and Alphabet Inc. (parent company of Google) all have offices in the HMA. Despite the recent economic downturn, the number of high- tech and scientific research jobs has continued to increase. From April through October 2020, Madison had a 74-percent increase in the inflow of tech workers, gaining 1.77 tech workers for each one that left, up from 1.02 during the same period in 2019 (LinkedIn). Beyond the city of Madison and surrounding suburbs where government, high-tech, and scientific research employers are concentrated, specialized industries in smaller towns and rural parts of the HMA include food and beverage manufacturing and tourism. The state of Wisconsin is a leading cheese producer in the nation. In the HMA, milk production, the primary ingredient used to make cheese, had a market value of nearly $480 million (2017 Census of Agriculture). New Glarus Brewing Company, a beer company, brews and bottles its product in Green County. Despite selling the product exclusively in Wisconsin, the company was ranked 15th in sales among craft breweries and 25th in sales among all breweries nationally in 2019. In northwest Columbia County and adjacent Sauk County, the Wisconsin Dells, a tourist area described as the “Waterpark Capital of the World,” draws 4 million visitors annually and had a $1.4 billion economic impact statewide in 2020 (Wisconsin Dells Visitor and Convention Bureau). Current Conditions—Monthly Not Seasonally Adjusted Nonfarm Payrolls The economy in the Madison HMA is currently recovering from the steep job losses that occurred during March and April 2020, primarily caused by measures to limit the spread of COVID-19. During the 2-month recession, monthly nonfarm payrolls fell by a total of 52,100 jobs, but they have generally been increasing since May 2020 (monthly data; not seasonally adjusted). Jobs in the leisure and hospitality sector accounted for nearly 40 percent of the job losses during the recession, despite the sector only accounting for 12 Months Ending September Months Ending September 2021 Absolute Change Percentage Change Total Nonfarm Payroll Jobs Goods-Producing Sectors Mining, Logging, & Construction Manufacturing Service-Providing Sectors Wholesale & Retail Trade Transportation & Utilities 9.5 9.3 -0.2 -2.1 Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government Notes: Based on 12-month averages through September 2020 and September 2021. Numbers may not add to totals due to rounding. Data are in thousands. 9 percent of total nonfarm payrolls in February 2020. In September 2021, total nonfarm payrolls in the HMA were 40,900 jobs above the April 2020 low, or 79-percent recovered. Jobs in the leisure and hospitality sector had a similar rate of recovery as the HMA overall, with 78 percent of jobs recovered in September 2021. Current Conditions—Most Recent 12-Month Nonfarm Payrolls During the 12 months ending September 2021, total nonfarm payrolls averaged down by 2,800 jobs, or 0.7 percent, from the previous 12 months ( U.S. 12-Month Average Unemployment Rate in the Madison HMA and the Nation Economic Periods of Significance 2001 Through 2008 The early and mid-2000s were a period of economic expansion in the Madison HMA. All gains were in the service-providing sectors, with an average increase of 4,000 jobs, or 1.3 percent. The professional and businesses services sector, which includes many high-tech and scientific research jobs, had the largest sector-level increase, rising by an average of 1,200 jobs, or 3.2 percent, annually. Partially offsetting gains in other sectors, the manufacturing sector had the largest decline, decreasing by an average of 700 jobs, or 1.7 percent, annually. A decline in the food manufacturing industry accounted for about one-half of the jobs lost in the sector. Job losses in the HMA were concentrated in the goods-producing sectors. The manufacturing sector fell by 3,600 jobs, or 10.3 percent, with layoffs occurring in all manufacturing industries, including the food and beverage and durable goods industries. A sharp decline in residential construction in the late 2000s contributed to the decline of 2,800 jobs, or 17.2 percent, in the mining, logging, and construction sector. 2010 Through 2019 The period from 2010 through 2019 was a time of rapid recovery and economic expansion. Nonfarm payrolls increased by an average of 5,600 jobs, or 1.5 percent, annually from 2010 through 2019, exceeding the pre- Great Recession high in 2012, nearly 2 years before the nation. Similar to the early to mid-2000s, the professional and businesses services sector led gains, rising by an average of 1,300 jobs, or 2.8 percent, annually. The information sector had the fastest growth rate, up an average of 4.8 percent, or by 600 jobs, annually. Unlike the previous period of expansion, when manufacturing jobs declined, jobs in the sector increased by an average of 500, or 1.6 percent, annually. Industries that contributed to the gain include chemical manufacturing; beverage and tobacco product manufacturing; and electrical equipment, appliance, and component manufacturing. Job growth was faster earlier in the period and moderated in the later years of the decade. From 2010 through 2016, job growth averaged 6,100, or 1.6 percent, annually, but it slowed to an average of 4,300 jobs, or 1.1 percent, annually from 2017 through 2019. A decline in the wholesale and retail trade sector, as consumers shifted to online shopping, and a slowdown in gains in the professional and businesses services sector, contributed to slower growth in the later years of the decade. With the unemployment rate below 3 percent in the late-2010s contributing to a tight labor market, and with Federal policy changes leading to a reduction in international immigration, job growth was partly constrained by a lack of available workers. Change in Jobs by ZIP Code At the ZIP Code level, job growth was concentrated in central Dane County. Downtown Madison, which includes the state capital and central business district, was the ZIP Code area with the most jobs in 2019, and it had the largest gain from 2010 to 2019, up by 15,200 jobs (Map 1). The gain is primarily attributed to an increase in public administration, professional and businesses services, and leisure and hospitality sector jobs. Areas with a large decline in jobs include east Madison ZIP Codes 53714 and 53704, where losses were concentrated in public administration, and the Wisconsin Dells tourist area, ZIP Code 53965, where the loss was concentrated in the leisure and hospitality sector.

[Assistant] Forecast During the 3-year forecast period, job growth is expected to occur at a rate similar to the early to mid-2010s, with nonfarm payroll gains averaging 1.6 percent annually. Based on a 12-month moving average, full payroll recovery from losses that occurred during 2020 is expected during the second year of the 3-year forecast period.


[User] The return of students to the UW campus and fans to UW sporting events for the Fall 2021 semester are expected to contribute to the ongoing recovery in the leisure and hospitality sector. Tight housing market conditions, which

[Assistant] Jobs in high-tech industries and scientific research are also expected to continue to increase. Recent expansion announcements include a $65 million investment by MilliporeSigma, a life science company, to build new research facilities and add 50 employees; an $11.4 million grant from the U.S. Department of Defense to FluGen, Inc., a flu vaccine research company; and a $2.3 million round of seed funding for the biotech startup Immuto Scientific for equipment, staffing, and marketing.


[User] Net natural increase also slowed during most years since 2010, further contributing to slower population growth in recent years. Population Trends and Forecast Population growth in the Madison HMA comes from both net natural increase and net in-migration. Net in-migration tends to be higher during periods of stronger economic growth and weaker when economic growth is slower. Since the end of the Great Recession, net natural increase has slowed, partially because of an increase in the senior population and a lower birth rate. In the 2000s, population growth averaged 7,000, or 1.2 percent, annually ( 2010 and 2019 American Community Survey, 5-year data Recession supported net in-migration, averaging 4,900 annually. Net natural increase was lower than in the 2000s, averaging 3,175 people annually. Since 2017, population growth slowed to an average of 5,200, or 0.8 percent, annually. Weaker job growth in the late 2010s, along with the onset of the COVID-19 pandemic and associated economic uncertainty, contributed to the slowdown. Net natural increase continued to moderate in the late 2010s and early 2020s, averaging 2,200 annually from 2017 to the current date. A more rapid decline in net natural increase has occurred since March 2020, partially because of the approximately 500 deaths attributed to COVID-19 (Wisconsin Department of Health Services). Net in-migration averaged 3,000 annually since 2017, with weaker economic conditions and increased restrictions on international immigration contributing to lower net in-migration.

[Assistant] During the 3-year forecast period, population growth is expected to average 0.9 percent a year, above the average from 2017 to the current date but below the growth rate of the early to mid-2010s. Net natural increase is expected to remain at lower levels as the birth rate continues to fall and health impacts from COVID-19 persist. Net in-migration is expected to increase from the current level, supported by job opportunities created by the continued expansion of the high-tech and scientific research industries and recovery of the leisure and hospitality sector.


[User] The senior population age 60 and over is the fastest growing age cohort. The cohort population increased an average of 4.0 percent annually to 20 percent of the total population, up from 15 percent (2010 and 2019 ACS, 5-year data). The youth cohort age 19 and under increased 0.3 percent annually; the older working-age adult cohort, age 40 to 59, declined 0.4 percent annually. Paul-Bloomington (U.S. Census Bureau Migration Flows, 2015–2019, 5-year data). Combined, net in-migration from the three large metropolitan areas totaled 3,175 ( U.S. Census Bureau Migration Flows, 2015–2019 American Community Survey, 5-year data Source: U.S. Current Population in the Madison HMA, by County At the ZIP Code level, population growth occurred in most ZIP Codes in Dane County, and trends were mixed in the other three counties with areas of growth and decline. The fastest growing ZIP Code in Dane County was ZIP Code 53703, which includes downtown Madison, up an average of 4.2 percent, or 1,300 people, annually (Map 2). The area also had the largest increase in jobs during the 2010s. The far east side of the city of Madison, ZIP Code 53718, includes a highway directly connecting to the Milwaukee- Areas with notable declines include the south and near west sides of the city of Madison, ZIP Codes 53726 and 53713, down an average of 1.6 percent, each, or 370 and 100 people, annually; these areas also had a decline in jobs in the 2010s. Households by Tenure The number of renter households has increased faster than the number of owner households since 2010, resulting in a decline in the homeownership Map 2. Since 2010, owner households increased an average of 0.8 percent annually, and renter households increased an average of 2.1 percent annually. A portion of the faster growth in renter households is due to an increase in student household growth. Since 2010, enrollment at UW increased by an average of nearly 500 students, or 1.1 percent, annually, up from an increase of about 140, or 0.3 percent, annually in the 2000s. The number of student households residing off-campus is currently estimated at nearly 16,000, or about 5 percent of the total households in the HMA. Household Trends and Forecast Household growth followed a relatively similar trend as population growth, with a steady increase in the number of households since 2000. Households by Tenure and Homeownership Rate in the Madison HMA Note: The current date is October 1, 2021. Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by the analyst

[Assistant] During the forecast period, household growth is expected to moderate from the average gain since 2000 to 3,325 households, or 1.1 percent, annually. Slower population growth in the forecast period relative to the early to mid-2010s is expected to contribute to the lower forecast gain in households.


[User] Current Conditions— Sales, Prices, and Inventory Home sales market conditions in the Madison HMA are very tight. The vacancy rate is currently estimated at 0.8 percent, down from 2.0 percent in 2010 (Table 5). During the 12 months ending September 2021, the average home sales price was up 12 percent from the previous 12-month period, the largest year-over-year increase since the housing boom in the mid- 2000s, and a faster increase than the 5 percent average annual increase from 2013 through 2020 (CoreLogic, Inc.). Annual price increases have only exceeded 10 percent two other times since 2000—in 2004, when prices increased 14 percent, and in 2006, when prices increased 13 percent. Home Sales Quick Facts Madison HMA Nation Vacancy Rate 0.8% NA Months of Inventory 1.2 1.8 Total Home Sales -Year Change 7% 12% Total Home Sales Price -Year Change 12% 18% Mortgage Delinquency Rate 0.8% 2.5% Table 5. Home Sales Quick Facts in the Madison HMA NA = data not available. Notes: The vacancy rate is as of the current date; home sales and prices are for the 12 months ending September 2021; and months of inventory and mortgage delinquency data are as of September 2021. The current date is October 1, 2021. Sources: Vacancy rate—estimates by the analyst; months of inventory—CoreLogic, Inc.; National and HMA home sales and prices—CoreLogic, Inc. Inventory has been below 6 months, which is considered balanced, since mid-2013. Despite uncertain economic conditions in 2020, home sales increased 7 percent during both the 12 months ending September 2021 and the 12 months ending September 2020, a reversal from the two previous 12-month periods when sales were declining. Sales during the most recent 12 months totaled 13,700, the highest number of sales since 2004. Current Conditions—Economic Factors: Mortgage Interest Rates, Telework, and Affordability Low mortgage interest rates also contributed to tight market conditions, with the lower rates attracting more prospective buyers. Rates were near 50-year lows during the most recent 12 months, averaging 2.9 percent for a 30-year fixed-rate mortgage, down from an average of 3.4 percent during the previous 12 months (FreddieMac). During the third quarter of 2021, the HMA was ranked the 59th most affordable place to live among 238 metropolitan areas (NAHB/Housing Opportunity Index). A median-income family in the HMA could afford 77.7 percent of homes for sale. By comparison, the Milwaukee, Chicago, and Minneapolis metropolitan areas, the three most common sources of net in-migration, had a smaller share of homes for sale that were affordable to median-income families in their respective areas, at 71.5, 62.3, and 76.9 percent. A portion of the higher level of affordability in the HMA is due to higher incomes. The median family income in the HMA is or $18,700 and $16,000 higher, respectively, than the Milwaukee and Chicago metropolitan areas, and it is only $1,800 below the median family income for the Minneapolis metropolitan area. Home Sales Historical Trends Home sales, including new and existing home sales, reached a post-Great Recession low in 2011. During the period of economic recovery and early expansion in the HMA in the early to mid-2010s, sales increased during most years but then declined in 2018 and 2019, when economic growth was slower. From 2012 through 2017, sales increased by an average of 980, or 10 percent, annually, to 13,200 in 2017, and then fell by an average of 460, or 4 percent, annually during 2018 and 2019 to 12,275 in 2019. With the onset of the COVID-19 pandemic, low mortgage interest rates, and a shift in where some work is performed, home sales increased, rising an average of 6 percent annually from 2020 through the current date to 13,700 during the 12 months ending September 2021. Home Sale Price Historical Trends Home sales prices have increased steadily since the HMA fully recovered from the Great Recession. From 2013 through 2019, a period of economic expansion, home sales prices increased steadily at an average rate of 5 percent, or $11,450, annually. Despite economic uncertainty in 2020, several factors—including a low inventory of homes for sale, low mortgage interest rates, and changes to where work is performed—contributed to an increase in demand for homebuying, accelerating price growth. From 2020 through the current date, home sales prices increased an average of 9 percent, or $24,900, annually. Although necessary to reduce construction in the early 2010s because of weaker economic conditions and the elevated level of inventory of homes for sale, inventory of available homes for sale fell below what would be considered balanced levels in mid-2013 and has continued to decline. Despite low inventory and steadily rising prices, permitting increased only modestly in the early- and mid-2010s and was steady later in the decade. In 2011, permitting was at a low of 770, but it increased by an average of 200 homes annually from 2012 through 2016 as the economy expanded, rising to 1,775 in 2016. Permitting remained relatively steady, averaging 1,700 annually from 2017 through 2019. In response to a tightening housing market, permitting increased to 1,950 during the 12 months ending September 2021, up from 1,700 during the previous 12 months. Construction by Geography Like job and population growth, a large majority of new home construction, as measured by single-family permitting, has been in Dane County. 12-Month Average Sales Price by Type of Sale in the Madison HMA REO = real estate owned. Average Annual Sales Permitting Activity in the Madison HMA 12ME = 12 months ending. Sources: U.S. Census Bureau, Building Permits Survey; 2000–2020 final data and estimates by the analyst; last 24 months of data—preliminary data and estimates by the analyst Prices for newly constructed single-family attached homes in the HMA start around and detached single-family homes start at . On the east side of the city of Madison is the large, multiphase Grandview Commons, a new urbanist style subdivision utilizing traditional neighborhood design principles such as front porches and rear garages. An attached 3-bedroom single-family home is currently listed for and a three-bedroom, 1,500-square-foot detached single-family home is listed starting at . In Sun Prairie, the West Prairie Village subdivision is nearly complete, with lots sold. Single-family detached homes with sizes ranging from 2,100 to 4,200 square feet are currently priced from to .

[Assistant] Forecast During the three-year forecast period, demand is expected for an additional 6,025 homes ( The forecast period is from October 1, 2021, to October 1, 2024. Source: Estimates by the analyst


[User] Rental Market Conditions and Recent Trends Rental market conditions in the Madison HMA are slightly tight. The current overall rental market vacancy rate is estimated at 3.0 percent, down from 6.7 percent in 2010 ( Excludes properties in lease-up. Apartment Rents and Vacancy Rates in the Madison HMA Apartment Market Quick Facts Current Average Rent YoY Change Current Vacancy Rate YoY Change Madison HMA Columbia County Downtown Madison East Madison Fitchburg Iowa County Middleton Outlying Dane County Sun Prairie Verona West Madison YoY= year-over-year. Notes: Average rent and vacancy rates are as of the third quarter of 2021. Apartment vacancy rates include only stabilized properties. Survey data are not available for Green County. Source: Group Includes apartments and units intended for rental occupancy. Sources: U.S. Census Bureau, Building Permits Survey; 2000–2020 final data and estimates by the analyst; last 24 months of data—preliminary data and estimates by the analyst Most of the apartments that opened earlier in 2021 are fully occupied. Rosewood Place, a 57-unit apartment development in the city of Oregon, in the Outlying Dane County market area, had the lowest asking rents among apartments completed in 2021, with rents ranging from $888 for a studio to $1,595 for a three-bedroom unit. The property was fully occupied as of August 2021. West Washington Place, a 51-unit property in downtown Madison, had the highest rents among apartments completed in 2021, with rents ranging from $1,824 for a studio to $3,035 for a three-bedroom unit. The property was fully occupied as of October 2021. Nearly all apartments under construction are in Dane County and range in size from the 288-unit Authentix Cottage Grove in east suburban Cottage Grove to the 36-unit Broad Branch Apartments in west suburban Middleton. Student Housing The number of student households residing off-campus is currently estimated at approximately 16,000, or about 13 percent of all renter households in the HMA. Since 2010, apartment construction in the UW campus ZIP Code and two immediately adjacent ZIP Codes accounted for 56 percent of all rental unit The average rent per bed at student apartments increased faster than the overall apartment market in the HMA, but the vacancy rate is currently higher. During the third quarter of 2021, the average student apartment rent was $903 per bedroom, up 5 percent from a year earlier, the same rate of growth as the previous year and faster than the average gain of 3 percent annually from the third quarter of 2017 to the third quarter of 2019 ( Group). The student apartment vacancy rate was 3.9 percent during the third quarter of 2021, down from 6.0 percent a year earlier, when fewer students were on campus. Rent growth for the overall apartment market in the HMA was 2 percentage points lower, and the vacancy rate was 1.8 percentage points lower, during the third quarter of 2021.

[Assistant] Forecast During the 3-year forecast period, demand is expected for an additional 8,600 units ( The forecast period is October 1, 2021, to October 1, 2024. Source: Estimates by the analyst Rental Units Demand 8,600 Units Under Construction 5,100 Units Table 9. Demand for New Rental Units in the Madison HMA During the Forecast Period


[User] Forecasts of housing demand were made to bring the sales and rental markets into balance during the next 3 years. This report discusses select data for the 10 HUD regions defined in the “Terminology Definitions and Notes” section at the end of the report. In 2020, many policies that were enacted to slow the spread of COVID-19 had negative economic consequences. More than 1 million jobs were lost in March, followed by nearly 20 million jobs lost in April, a total loss of 14 percent of nonfarm payrolls during the 2 months. Monetary and fiscal policies were enacted to lessen the economic impact and stimulate the economy, and many COVID-19- related policies have been relaxed or eliminated over time. By the end of 2021, approximately 97 percent of the jobs lost had been recovered on a monthly basis at the national level (monthly data, not seasonally adjusted). During the next 3 years, nonfarm payrolls are expected to increase an average of 2.3 percent a year. The national sales housing market is very tight, with an estimated 1.1 percent vacancy rate, down from 2.4 percent in 2010 when the market was soft. Although the sales housing market has been varying degrees of tight for the past few years, certain measures of housing market conditions in 2021 were indicative of an extreme shortage of sales housing. In 2021, the supply of existing homes for sale declined to 2.3 months, down from 3.1 months in 2020 (National Association of REALTORS® [NAR]). Since 2012, the median existing home sales price has doubled, with a 17-percent increase in 2021 alone. Overall, the total number of homes sold in 2021 was up 7 percent from 2020 (U.S. Census Bureau/HUD; NAR). During the next 3 years, demand is estimated for 2.69 million sales units. The units already under construction will meet a portion of that demand. The national rental housing market is very tight, with an estimated 5.8 percent vacancy rate, down from 9.2 percent in 2010 when the market was soft. The average monthly apartment rent increased 15 percent in the past year to $1,627, the highest year-over-year rent increase in at least 20 years (RealPage, Inc.). Single-family rental homes, which make up a smaller portion of the overall rental market than apartments, also had a significant increase in rents during the past year. From December 2020 to December 2021, the median rent for two-bedroom single-family homes that were professionally managed increased 12 percent to $1,592. Demand for rental units during the next 3 years is estimated at 1.90 million units. The rental units already under construction will satisfy a portion of that demand. Sales Market Very Tight: Home prices rose sharply in 2021, with double-digit gains in average sales prices for both new and existing home sales.

[Assistant] Units under construction as of January 1, 2022. The forecast period is January 1, 2022, to January 1, 2025. Source: Estimates by the analyst


[User] Long-Term Economic Trends From 2001 through 2019, nonfarm payrolls in the nation grew by an average of 0.7 percent, or jobs, annually. Growth during that period was interrupted by two recessions: the dot-com recession from March through November 2001 and the Great Recession from December 2007 through June 2009. The years leading up to the Great Recession are often referred to as the housing boom; the economy received a boost from strong homebuilding and home sales activity. Although the Great Recession ended in June 2009, the U.S. economy continued to lose jobs through 2010. The economy then underwent a lengthy period of expansion, adding jobs every year from 2011 through 2019. With the impact of COVID-19 and the many countermeasures implemented to contain the spread of the virus, the economy lost a significant number of jobs in early 2020. As more of the population became vaccinated and most of the countermeasures were lifted, the economy resumed growth in 2021. Growth during 2021 was led by the leisure and hospitality sector, which added jobs, or 7.2 percent. At the onset of the COVID-19 pandemic in 2020, this sector had the most job losses because of the closure or limited in-person availability of many restaurants and bars; reduced travel impacting hotels and places of recreation also contributed to losses in this sector. In 2020, the sector lost 3.44 million jobs, a decline of 20.7 percent. Within the sector, the accommodation and food services industry accounted for 80 percent of all the sector losses, with a decline of 2.80 million jobs. Although the leisure and hospitality sector accounted for 11 percent of all jobs in the nation during 2019, the sector represented 37 percent of the total jobs lost during 2020 and accounted for only 9 percent of all jobs during 2020. With the gains in 2021, the sector currently accounts for 10 percent of all nonfarm payrolls in the Note: 12-month moving average. Sources: U.S. 12-Month Average Nonfarm Payrolls in the Nation Approximately 78 percent of the sector gains in 2021 were in the accommodation and food services industry; restaurants reopened and people began to resume travelling. In 2021, there were 14.10 million jobs in the leisure and hospitality sector, still down 2.49 million jobs from the recent high in 2019. The professional and business services sector also added a significant number of jobs in 2021, up 4.6 percent, or by jobs, as many companies began to return to some form of in-person work, resulting in a greater demand for support services.

[Assistant] The fastest rate of growth during the past year occurred in the transportation and utilities sector, at 7.3 percent, or new jobs. Included in this sector are distribution centers, which continue to grow in number and size to support an increase in e-commerce that has accelerated in the past year. E-commerce sales increased 47 percent during the first quarter of 2021 relative to the first quarter of 2020 (U.S. Census Bureau News, Quarterly Retail E-Commerce Sales, U.S. Department of Commerce, May . Gains in e-commerce sales ranged from 9 to 15 percent during the other quarters of 2021. By the fourth quarter of 2021, e-commerce sales accounted for 16 percent of all retail sales, up from 12 percent in the fourth quarter of 2019, and that share has continued to rise. To lessen the economic impacts of the COVID-19 pandemic and help stimulate the economy, the federal government implemented several Notes: Total nonfarm payroll is in thousands. Percentages may not add to 100 percent due to rounding. Based on 2021 annual data. Source: U.S. Share of Nonfarm Payroll Jobs in the Nation, by Sector fiscal and monetary policies during 2020. In March, Congress passed a $2.2 trillion stimulus measure, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which included payments to qualifying individuals (typically billion in increased unemployment benefits, $350 billion in loans to small businesses, $500 billion for corporate loans, and nearly $340 billion in funding for state and local governments. In December 2020, Congress passed another stimulus package, the Consolidated Appropriations Act 2021, which was worth $920 billion and included $600 payments to qualified individuals and extended unemployment benefits, among other items. In March 2021, the government passed the American Rescue Plan Act of 2021 (also known as the American Rescue Plan), which included $1.9 trillion of economic stimulus. The American Rescue Plan extended the expanded unemployment benefits in previous stimulus measures, included $1,400 direct payments to qualified individuals, extended food stamp benefits, provided funds to state, local, and tribal governments, provided additional funding Real gross domestic product (GDP) increased 5.7 percent during 2021 after declining 3.4 percent in 2020. Growth was strong throughout most of the year, with gains of more than 6 percent each quarter (seasonally adjusted annual rates), except during the third quarter, when real GDP increased at a rate of 2.3 percent (U.S. Bureau of Economic Analysis). The annual rate of inflation averaged 4.7 percent during 2021 and reached 7.0 percent in December 2021 (Consumer Price Index for All Urban Consumers, not seasonally adjusted, ). Current Conditions— Regional Nonfarm Payrolls The number of jobs increased in all 10 HUD regions during 2021, ranging from 1.9 percent in the Great Plains region to 3.8 percent in the Southeast/Caribbean region (Map 1). The leisure and hospitality sector led growth in every region both in terms of the total number of jobs added and the rate of increase. Sector gains ranged from 8.6 percent in the Great Plains region to 14.3 percent in the New York/New Jersey region. In the Southeast/Caribbean region, the jobs added in the leisure and hospitality sector, or 9.3 percent gain, was followed closely by new jobs in the professional and business services sector, up 6.2 percent. The two sectors combined accounted for nearly half the net jobs added in the region. Growth of more than 3.0 percent also occurred in the Rocky Mountain (3.7), Pacific (3.5), New England (3.4), and New York/New Jersey (3.1) regions. In addition to the 67,200 jobs, or 11.8 percent, added to the leisure and hospitality sector in the Rocky Mountain region, the professional and business services sector gained 38,500 jobs, or 4.9 percent, and the retail trade subsector grew by 29,000 jobs, or 4.7 percent. The pattern was similar in the Pacific region, with the largest gains also in the leisure and hospitality sector, professional and business services sector, and retail trade subsector, which were up by and jobs, or 11.0, 3.9, and 4.9 percent, respectively. The transportation and utilities sector had the second fastest rate of growth in the Pacific region, up 8.4 percent, or by 81,500 jobs. The professional and business services sector added the second largest number of jobs in both Absolute Change Percentage Change Total Nonfarm Payroll Jobs Goods-Producing Sectors Mining, Logging, & Construction Manufacturing Service-Providing Sectors Wholesale & Retail Trade Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government Notes: Based on 2020 and 2021 annual data. Numbers may not add to totals due to rounding. Data are in thousands. Table 1. Nonfarm Payroll Jobs (1,000s) in the Nation, by Sector


[User] Nonfarm payroll growth was below 3.0 percent in the remaining five regions. In the Southwest region, where jobs were up 2.9 percent, the leisure and hospitality and professional and business services sectors accounted for more than 58 percent of the total job gains, with additions of or 8.9 percent, and or 6.3 percent, respectively. Similarly, in the Northwest region, the leisure and hospitality and professional and business services sectors accounted for 47 percent of the new jobs. The retail trade subsector added 31,900 jobs, up 4.5 percent. In the Midwest region, approximately half of all new jobs were in the leisure and hospitality and professional and business services sectors, with gains of or 9.1 percent, and or 3.8 percent, respectively. In the Mid-Atlantic region, these same two sectors accounted for nearly 59 percent of all new jobs in 2021, with the leisure and hospitality sector up by jobs, or 10.5 percent, and the professional and business services sector up by 67,300 jobs, or 3.0 percent. Retail trade subsector gains were also notable in the Mid-Atlantic region, with the addition of 54,500 jobs, or 4.0 percent. Finally, in the Great Plains region, the most job gains occurred in the Map 1. Nonfarm Payroll Growth by HUD Region, 2020–21 leisure and hospitality sector, up by 48,100 jobs, or 8.6 percent, and the retail trade subsector, up by 19,700 jobs, or 2.8 percent. Progress of the Recovery By the end of December 2021, on a monthly basis, the national economy recovered 97 percent of the nearly 21 million jobs that were lost in March and April of 2020. Map 2 shows the percent of nonfarm Nineteen states fully recovered the jobs lost due to the pandemic, with 17 of those states surpassing prepandemic job levels. The two states with the highest rates of recovery were Utah and Idaho, with 161 percent and 158 percent of the total jobs recovered. Maine and New Jersey both recovered 100 percent of the jobs lost. Nevada and Nebraska recovered more than the national rate but were not quite fully recovered by the end of 2021. There are six states that, along with the District of Columbia, recovered less than 80 percent of the jobs lost from the COVID-19 pandemic, including North Dakota, Kansas, Minnesota, Louisiana, Hawaii, and Alaska. Approximately 52 percent of the jobs lost in the District of Columbia were recovered by the end of 2021. Current Conditions— Unemployment During 2021, the unemployment rate averaged 5.3 percent, down from an average of 8.1 percent in 2020, and it was the same level that it had averaged in 2015. The 12-month average unemployment rate previously peaked at 9.7 percent during 2010, but it declined steadily through 2019, reaching a prepandemic average low of 3.7 percent during the 12 months ending March 2020. As a result of the COVID-19 recession, the unemployment rate rose to a high Map 2. Percent of Nonfarm Payroll Jobs Recovered by December .7 percent during the 12 months ending March 2021. The number of unemployed people rose from 6.00 million in 2019 to 12.95 million in 2020, the highest yearly total since 13.75 million people were unemployed in 2011. During 2021, the number of unemployed people declined to 8.62 million. Large fluctuations in the labor force have also occurred in the past couple of years. During 2020, the labor Economic Periods of Significance Note: Based on the 12-month moving average. Source: U.S. 12-Month Average Unemployment Rate in the Nation 2000 Through 2004: Recession and Recovery The recession in the early 2000s officially lasted 8 months, from March 2001 through November 2001 (National Bureau of Economic Research [NBER]). During 2001, job growth in the nation was flat. The manufacturing sector experienced significant losses, declining by jobs, or 4.8 percent. The wholesale trade subsector, the professional and business services sector, and the federal government subsector had significant declines of and jobs, or 2.7, 1.1, and 3.5 percent, respectively. The education and health services sector grew by jobs, or 3.7 percent, during the year, offsetting some of the losses in other sectors. 2005 Through 2006: The Housing Boom The rate of job growth in the nation increased significantly in 2005 and 2006, averaging gains of 2.33 million jobs, or 1.8 percent, each year. During these years, the fastest growing sector was the mining, logging, and construction sector, which was up an average of 5.2 percent, or jobs, annually. Nearly all the growth in that sector came from the construction subsector, which increased by jobs each year. The nominal annual value of construction (residential and nonresidential) averaged $1.14 trillion from 2005 through 2007—an increase of 31 percent compared with an average annual level of $875 billion during 2000 through 2004 (U.S. Census Bureau). Other sectors with significant payroll gains during 2005 and 2006 were the professional and business services, education and health services, and leisure and hospitality sectors, with average annual gains of and jobs, or 3.5, 2.6, and 2.4 percent, respectively. Declines continued in the manufacturing and the information sectors, but the rates of decline slowed. The manufacturing sector lost an average of 80,000 jobs, or 0.6 percent, annually, and the information sector was down an average of 40,000 jobs, or 1.3 percent, annually. 2007: The Slowdown Nonfarm payrolls continued to grow through 2007, but the rate of growth slowed to 1.1 percent, or 1.55 million jobs added. Growth continued in 7 of the 11 sectors during 2007, led by the education and health services sector, up by jobs, or 2.9 percent. The professional and business services sector continued to grow at a strong pace of 2.2 percent, or jobs, which was a noticeable slowdown from growth during the previous 2 years. The leisure and hospitality sector also had significant gains of jobs, or 2.4 percent, in 2007. The largest decline in jobs was in the manufacturing sector, down or 1.9 percent. Small declines occurred in the mining, logging, and construction; the financial activities; and the information sectors, with average decreases ranging from 0.2 to 0.3 percent. The construction subsector had a decline of 0.8 percent, or 61,000 jobs, during 2007, because the housing market began to soften following the bursting of the housing bubble. This was partly offset by a gain of 40,000 jobs, or 5.8 percent, in the mining and logging subsector. 2011 Through 2016: The Expansion Annual job gains resumed in 2011, and jobs were added in the nation every year through 2019. From 2011 through 2016, nonfarm payrolls increased by an average of 2.33 million jobs, or 1.7 percent, annually. Every sector except for the government sector added jobs during that period. The professional and business services sector led growth, with an average gain of jobs, or 3.1 percent, a year. The leisure and hospitality and the education and health services sectors each increased by an average of more than jobs, or 3.1 and 2.1 percent, a year, respectively. The construction subsector was slower to recover, but by 2014 and 2015, the subsector was averaging gains of 5.0 percent, or jobs, a year. Not until 2014, however, did the economy recover all the jobs lost from 2008 through 2010. 2017 Through 2019: Continued Growth Job growth slowed slightly from 2017 through 2019, averaging gains of 2.19 million jobs annually, or 1.5 percent growth. Growth slowed partially because of fewer available workers; the nation had a historically low level of unemployment, averaging 4.0 percent during the period, and many job openings were harder to fill. Every sector added jobs during the 3 years except the wholesale and retail trade sector, which declined by an average of 36,700 jobs, or 0.2 percent, partly reflecting growth in e-commerce. Average losses of 70,600, or 0.4 percent, in the retail trade subsector more than offset the increase of 33,900, or 0.6 percent, in the wholesale trade subsector. The education and health services, the professional and business services, and the leisure and hospitality sectors led gains during the period—up by average annual rates of 2.2, 1.9, and 1.9 percent, or and jobs, respectively. The fastest rate of growth was in the transportation and utilities sector, up 3.8 percent, or jobs, a year, followed by the mining, logging, and construction sector, up 3.6 percent, or jobs.

[Assistant] Forecast During the next 3 years, nonfarm payroll jobs are anticipated to grow at an average of 2.3 percent annually. Growth is anticipated to be strongest in the first year and gradually slow in years 2 and 3. On a monthly basis, nonfarm payrolls should be fully recovered at the national level in the first year of the forecast. The Federal Reserve System (The Fed) has begun to take aggressive steps towards reducing inflation by raising the federal funds rate. The Fed has signaled that they are likely to continue to raise rates throughout 2022, which will likely cause economic growth to dampen and contribute to the more subdued rates of job growth in the later years of the forecast. The transportation and utilities sector is expected to continue to have strong gains with the increasing popularity of e-commerce. The leisure and hospitality sector is also expected to have significant growth as people continue to become more comfortable with social interaction, increasing business for restaurants, travel, and tourism.


[User] Population Trends From 2000 to 2005, a period including the 2001 recession and the subsequent moderate economic expansion, the population of the United States grew by an average annual rate of 0.9 percent, or 2.69 million (U.S. Census Bureau decennial census counts and population estimates as of July 1). Net natural change accounted for 61 percent of the growth, or an average increase of 1.64 million people annually, and net in-migration to the United States averaged 1.05 million people, accounting for 39 percent of the population gain. Population growth increased from 2005 to 2008 to an average annual rate of 1.0 percent, or 2.86 million people. Net natural change increased significantly during the period to an average of 1.82 million people, accounting for 64 percent of population growth, and net in-migration averaged 1.04 million people, or 36 percent of the population gains. From 2008 to 2010, when the United States lost jobs due to the Great Recession, population growth slowed to an average annual rate of 0.9 percent, or 2.66 million people. Net natural change declined to an average of 1.77 million people a year, partly reflecting fewer births during the recession, but accounted for 67 percent of population growth, and net in-migration slowed significantly to an average of people a year, or 33 percent of population growth. As the economy expanded from 2010 to 2016, the average level of net in- migration increased to 1.13 million people a year, accounting for 45 percent of population growth. Net natural change continued to decline at a significant rate, averaging 1.37 million people a year, or 55 percent of population growth. That decline was partly due to an aging population, with an increase in the number of deaths, along with birth rates remaining low following the recession. As a result, the total population increased by 2.50 million, or 0.8 percent, annually. The rate of population growth continued to slow, to an average annual rate of 0.6 percent, or 1.90 million people, from 2016 to 2020. Net in-migration slowed to an average of people a year, but it accounted for 47 percent of the population gains during the period, and net natural change declined to an average of 1.01 million people, or 53 percent of growth. Since 2020, as a result of the impacts of COVID-19 and the policies enacted to contain its spread, both net natural change and net in-migration are estimated to have slowed considerably. From 2020 to the current date, the population grew at an average annual rate of 0.2 percent, or . With many deaths associated with COVID-19, the rate of net natural change slowed to an average of people a year, representing 27 percent of the total growth in population during the period. Net in-migration also slowed considerably because of COVID-19 and averaged a year, accounting for 73 percent of the total population growth since 2020.

[Assistant] During the 3-year forecast period, the population is expected to increase at an average annual rate of 0.4 percent, or approximately 1.50 million people. Net natural change and net-in migration are expected to average and 1 million people a year, respectively. The population is expected to total 336.89 million by the end of the forecast period (Table 2). The forecast period is from the current date (January 1, 2022) to January 1, 2025. Sources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—estimates by the analyst Table 2. Population and Household Quick Facts for the Nation


[User] International Migration From 2010 through 2019, the largest number of immigrants to the United States came from Mexico, China (defined as China, Hong Kong, Macau, and Paracel Islands), and India (American Community Survey [ACS] 1-year data, Public Use Microdata Sample). Mexico accounted for the greatest number of immigrants into the United States from 2010 through 2013, averaging 12 percent of all U.S. immigrants. China and India accounted for an average of 8 percent of immigrants during these years. In 2014, China (10 percent) surpassed Mexico (9 percent), and in 2015, India (10 percent) surpassed China (9 percent). From 2016 through 2018, China resumed the top spot, accounting for 10 percent of all immigrants, with Mexico and India each averaging 9 percent. In 2019, the largest number of immigrants to the United States came from Mexico (10 percent), followed by China (9 percent) and India (8 percent). During 2020, numerous policies were enacted that had the effect of restricting immigration to the United States, undertaken as part of the efforts to reduce the spread of COVID-19. Many of these policies have since been lifted. Age Cohort Trends The median age in the United States in 2021 was 38.8 years, up from 37.2 years in 2010. The largest population by age range in the United States is the 20-to-39-year-old age cohort, which constituted 26.9 percent of the total population as of 2021, compared with 26.8 percent in 2010 (U.S. Census Bureau Population Estimates). The under-20 age cohort declined from 26.9 percent of the population in 2010 to 24.8 percent in 2021. In addition, the 40-to-59-year-old cohort also declined, from 27.7 percent of the total population to 25.1 percent during the same period. As the baby boom generation has aged, the 60-to-79-year-old age cohort has grown substantially. In 2010, this age group made up 14.9 percent of the total population, but by 2021 it had grown to 19.5 percent of the population. This helps explain the steady growth in healthcare-related services throughout the country, because this age group tends to be a major consumer of health services. The 80-and-older age group remained stable during the period, accounting for 3.7 percent of the total population in 2010 and 2021. Components of Population Change in the Nation, 2000 Through the Forecast Notes: Net natural change and net international migration totals are average annual totals over the period.

[Assistant] The forecast period is from the current date (January 1, 2022), to January 1, 2025. Sources: U.S. Census Bureau; current and forecast—estimates by the analyst


[User] Map 3 shows the population growth rates by region. The national population remained relatively unchanged during that period, increasing by only 0.1 percent. The highest rate of growth occurred in the Rocky Mountain region, up 0.9 percent, followed by the Southeast/Caribbean region at 0.8 percent and the Southwest region at 0.7 percent. The Northwest region increased 0.5 percent, whereas the population in the Great Plains region nudged up 0.1 percent. Population declined in the other HUD regions, led by a 1.1 percent drop in the New York/New Jersey region. In the Pacific region, the population decreased 0.3 percent, and the population in the Midwest region fell 0.2 percent. The populations were down slightly in the New England and Mid-Atlantic regions by 0.1 percent each. Source: 2010 and 2021 U.S. Population by Age Range in the Nation Map 3. Population Growth by HUD Region, 2020–21 Source: U.S. Census Bureau Population Estimates Program Household Trends The number of households in the United States is currently estimated at 128.19 million, representing an average annual increase of 0.8 percent, or households, since 2010. From 2000 to 2010, the number of households increased at a somewhat faster average annual rate of 1.0 percent, or 1.12 million households, due largely to higher population growth compared with the 2010s. After the housing bubble burst and the economy entered the Great Recession, overall tenure distribution shifted from ownership to renting among households throughout the country. In part, that shift occurred because younger households have been delaying homeownership compared with previous generations. In absolute terms, from 2000 to 2010, the number of owner households increased by an average of per year, whereas renter households increased by a year. Since 2010, owner household growth slowed to a year, and renter household growth averaged annually. As a result, the rate of owner household growth has slowed since 2010, and the homeownership rate in the country has declined to a current estimated level of 64.6 percent, down from 65.1 percent in 2010 and down from a peak of 69.0 percent in 2004. Currently, an estimated 82.79 million owner households and 45.40 million renter households reside in the United States. During the next 3 years, households are expected to increase by an average of or 0.6 percent, annually, as the rate of population growth slows compared with the 2010s. Current Conditions The national home sales market continued to be very tight in 2021, with an estimated 1.1 percent vacancy rate as the supply of homes for sale reached an extremely low level. The home sales market was already tight in 2020, with a 3.1-month supply of existing homes for sale, before dropping to a 2.3-month supply in 2021 (NAR). In contrast to a typical recessionary period, when a weak economy negatively affects the home sales market, the national recession in March and April 2020 did not result in a lower demand for homes. The inventory of homes for sale dropped below 1 million in 2021—a 17-percent decline from 2020 and a 37-percent decline from 2019. In 2021, year-over-year existing home sales increased 9 percent (NAR), but new home sales declined 6 percent—the first decline in the number of new homes sold in 10 years (U.S. Census Bureau/HUD). The decline in new home sales in 2021 can be partly attributed to new homes becoming increasingly expensive and out of reach for many homebuyers. Because of the limited supply of homes for sale, prices increased in 2021 at rates even higher than during the housing bubble of the 2000s. The median new home sales price rose 18 percent to and the median existing home sales price increased 17 percent to compared with 2020 ( Seriously delinquent mortgages are those that are 90 or more days delinquent. Source: CoreLogic, Inc. Current Regional Highlights The sales housing markets in the 10 HUD regions had mixed conditions during the fourth quarter of 2021, ranging from balanced to very tight. The Southeast region was the only region with balanced sales markets, whereas sales markets in the other nine HUD regions all had varying degrees of tight conditions. Despite the Southeast region having some balanced markets, which were limited to the state of Mississippi, the vast majority of sales markets in the region were tight. According to the CoreLogic, Inc. home price index (HPI) for repeat sales, price appreciation was highest in the states in the Southeast region from December Four of the top 10 states in the country for price appreciation were in the Southeast region, with price increases ranging from 13 percent in Kentucky to 27 percent in Florida. Home prices increased in the double- digits in 46 of the 50 states, but all states had an increase in the HPI. No state in the country had a price appreciation of less than 7 percent in the past year. For additional home sales market data by HUD region, visit the regional housing market information page on the PD&R U.S. Housing Market Conditions website. Home Sales Trends: 2000 to Current Before the housing crisis during the latter half of the 2000s, home sales growth in the nation was rapid, with home sales reaching a peak of 8.36 million in 2005 (NAR; U.S. During that period, home sales rose because mortgage lending standards were more relaxed and more mortgages were issued to riskier borrowers, which helped to inflate home sales. From 2001 through 2006, subprime and near-prime loans increased from 9 to 40 percent of all mortgage originations (U.S. Economics Analyst, Goldman Sachs). During roughly the same period, from 2001 through their peak in 2005, existing home sales increased an average of 6 percent a year, and new home sales increased an average of 8 percent a year (NAR; U.S. Census Bureau/HUD). National Home Sales Sources: National Association of REALTORS®; U.S. Census Bureau/HUD rates increased in 2006, new and existing home sales declined 18 and 8 percent, respectively, with the decrease accelerating in 2007 after the housing bubble began to burst. For the next few years, the home sales market in the United States was extremely soft. As a result, new and existing home sales continued to decline, with existing home sales bottoming out in 2008 and new home sales bottoming out in 2011. From peak to trough, new home sales declined at an average annual rate of 8 percent, and existing home sales declined at an average annual rate of 28 percent. After their respective lows, new and existing home sales trended upward as the economy improved and sales market conditions tightened. From 2009 through 2016, existing home sales increased at an average annual rate of 4 percent before declining from 2017 through 2019 at an average annual rate of 1 percent. New home sales also had faster growth during the earlier years of the recovery from the housing crisis, increasing at an average annual rate of 13 percent from 2012 through 2016 and slowing to an average annual rate of 7 percent from 2017 through 2019. Since 2019, existing home sales have picked up, increasing 7 percent a year, and new home sales have slowed slightly to an average increase of 6 percent annually. The median existing home sales price increased an average of 8 percent a year from 2001 through the peak in 2006, whereas the median new home sales price peaked a year later, increasing an average of 6 percent a year from 2001 through 2007 (NAR; U.S. Census Bureau/HUD). Sales prices declined for both new and existing home sales in the years that followed; however, the peak-to-trough decline in existing home sales prices (25 percent) was more severe than the decline in new home sales prices (13 percent) and lasted nearly twice as long. From 2008 through 2009, the median price for new homes sold declined an average of 7 percent a year, and from 2007 through 2011, the median price for existing homes sold decreased an average of 6 percent a year. In large part, this was because the proportion of existing sales that were REO properties swelled during this time, and the relatively low prices for REO home sales created downward pressure on overall existing home sales prices. REO sales constituted a small proportion of existing home sales from 2000 through 2007, averaging around 3 percent (CoreLogic, Inc.). With the onset of the Great Recession, that percentage skyrocketed to 32 percent in 2009, a year when the average sales price for an REO home was nearly 50 percent below the price of a regular resale home. After median sales prices reached lows of for new homes in 2009 and for existing homes in 2011, price growth was relatively steady through the 2010s (U.S. Census Bureau/HUD; NAR). The median sales price for new homes increased an average of 4 percent a year from 2010 through 2019. Price growth for existing homes was also steady from 2012 through 2019, with the median sales price increasing an average of 6 percent a year. As the COVID-19 pandemic began and the housing market tightened, home price growth accelerated. From 2020 through 2021, the median price for new home sales increased an average of 11 percent annually, and the median price for existing home sales increased an average of 13 percent annually. In 2021, the price difference between the median existing home sales price and the median new home sales price declined to 14 percent—the smallest difference between the two sales types since 2007. National Home Sales Prices Sources: National Association of REALTORS®; U.S. Census Bureau/HUD From 2000 through 2005, when home sales and prices increased, the number of sales units permitted averaged 1.56 million units a year. During the next 4 years, the number of sales units permitted dropped precipitously, averaging units permitted a year, or a decline of 38 percent from the previous period. Sales building activity stabilized at low levels from 2009 through 2011, at sales units permitted annually, as the housing market worked to absorb an excess supply of sales inventory. In the years that followed, the number of sales units permitted increased at a steady rate of 9 percent a year to approximately in 2019. Since then, the pace of sales construction has accelerated to an average of 13 percent a year to approximately 1.16 million sales units permitted in 2021, the highest level since 2007.

[Assistant] Forecast Strong demand for sales housing is expected to continue during the forecast period as the economy continues to grow in the aftermath of the pandemic- induced downturn. HUD First-Time Homebuyer Affordability Index for the Nation period ( The forecast period is from January 1, 2022, to January 1, 2025. Source: Estimates by the analyst


[User] Current Conditions and Recent Trends The national rental market is very tight, with an estimated vacancy rate of 5.8 percent—down from 9.2 percent in 2010, when the market was soft ( RealPage, Inc. Apartment Rents and Vacancy Rates in the Nation apartments faced increased competition from investor-owned condominiums and single-family homes entering the rental market. During the housing crisis, the increase in condominium and single-family rentals came from two main sources: (1) investors buying foreclosed properties and offering them for rent and (2) households needing to relocate and move out of their homes but without enough equity to sell. In the years since the Great Recession, the average apartment vacancy rate has mostly trended downward, but the average monthly effective rent in the nation increased at a steady rate until 2020. From the fourth quarter of 2009 to the fourth quarter of 2019, the average apartment vacancy rate decreased from 7.7 to 4.2 percent, or an average of 0.4 percentage point a year (RealPage, Inc.). At the same time, the average effective monthly rent increased an average of 4 percent annually, from $942 in the fourth quarter of 2009 to $1,423 in the fourth quarter of 2019. The COVID-19 pandemic and 2020 recession led to a brief softening of the apartment market as the average monthly effective rent declined 1 percent and the average vacancy rate increased by 0.1 percentage point from the fourth quarter of 2019 to the fourth quarter of 2020. The slowdown in rental demand was short-lived, however, and by the fourth quarter of 2021, the average rent for apartments was up 15 percent, year-over-year, and the average vacancy rate was down by 1.8 percentage points. The fourth quarter of 2021 had the Rental Construction Activity Rental building activity (see Rental Construction), as measured by the number of rental units permitted, averaged much higher levels during the 2010s in response to stronger growth in rental demand and tighter rental market conditions compared with the previous decade. As the rental market softened considerably in 2009, rental permitting dropped and remained at relatively low levels for 3 years, averaging units permitted annually through 2011, or nearly half the average annual level during the previous 9 years. Rental building activity began to recover in earnest from 2012 through 2015, increasing at an average annual rate of 24 percent. For the next 5 years, the number of rental units permitted was fairly steady, averaging units per year. As the rental market tightened and rents rose rapidly in 2021, the number of rental units permitted reached a high of approximately units. Housing Affordability: Rental Rental affordability across the nation increased through the 2010s, with the median income for renter households increasing at a faster rate than the median gross rent. From 2010 to 2019, the median income for renter households increased 38 percent, whereas the median gross rent increased 28 percent. It is likely that rental affordability has declined substantially since 2019 because of the rapid rent growth during the past year. Note: Includes apartments and units intended for rental occupancy. Sources: U.S. Annual Rental Permitting Activity in the Nation Note: The Gross Rent Affordability Index differs from the HUD Rental Affordability Index published on the U.S. Housing Market Conditions website in that it is based on combined rent and utilities expenditure. Gross Rent Affordability Index for the Nation During the 2014-through-2018 period, an estimated 21.8 percent of all renter households in the nation had a moderate to high cost burden, spending between 31 and 50 percent of their income on rent, whereas 22.6 percent were severely cost burdened, spending more than 50 percent of income toward rent (Table 6). The cost burdens are significantly worse for very low- income renter households. For renter households with incomes less than 50 percent of the Area Median Family Income, 24.7 percent experienced moderate to high cost burden and 51.2 percent were severely cost burdened. Income-eligible residents may qualify for project- based rental assistance (PBRA) or housing choice vouchers (HCV) through their local public housing authority (PHA). Nationwide, PHAs administered approximately 2.3 million HCVs in 2021, an increase of more than 14 percent from 2010 (HUD’s Picture of Subsidized Households). The average monthly subsidy has increased 1.5 percent since 2010, whereas the monthly tenant contribution has decreased 2.5 percent (Table 7). Despite nearly 4.6 million American households receiving rental assistance, funding limitations prevent three out of four eligible households from receiving housing assistance.

[Assistant] Moderate to High Cost Burden: 31–50 Percent of Income Toward Housing Costs Severe Cost Burden: 51 Percent or More of Income Toward Housing Costs Renter Households with Income <50% HAMFI 24.7 51.2 Total Renter Households 21.8 22.6 Dollar changes are inflation-adjusted using the Consumer Price Index for All Urban Consumers (CPI-U). Source: HUD Picture of Subsidized Households The forecast period is January 1, 2022, to January 1, 2025. Source: Estimates by the analyst


[User] Cost Burdened Spending more than 30 percent of household income on housing costs. Moderate to high-cost burden refers to households spending 31 to 50 percent of income on housing costs. Severe cost burden refers to households spending 51 percent or more of income on housing costs.

[Assistant] Demand The demand estimates in the analysis are not a forecast of building activity. They are the estimates of the total housing production needed to achieve a balanced market at the end of the 3-year forecast period given conditions on the as-of date of the analysis, growth, losses, and excess vacancies. The estimates do not account for units currently under construction or units in the development pipeline.


[User] The rental market vacancy rate is currently estimated at 7.0 percent compared with 7.8 percent in 2010. Apartment market conditions are slightly tight but easing from a year ago. Among apartments, which account for 42 percent of rental units in the Milwaukee HMA, the vacancy rate was at an historic low during the fourth quarter of 2021 but then increased 0.8 percentage point to 4.1 percent as of the fourth quarter of 2022 ( Group). The current rate is below the historical averages of 5.5 percent from 2017 to 2019 and 4.9 percent from 2010 to 2016.

[Assistant] During the 3-year forecast period, demand is expected for an additional 9,075 rental units, with slightly more than one-half of the demand in Milwaukee County. The 6,350 units currently under construction are expected to meet demand during the first two years of the forecast period. Units under construction as of January 1, 2023. The forecast period is January 1, 2023, to January 1, 2026. Source: Estimates by the analyst