[User] Current payrolls are 32,400 jobs, or 3.7 percent below 2019, which was the prepandemic peak. The HMA lags behind the recovery in the nation, where 2022 payrolls were 1.1 percent above 2019 levels. Despite the HMA gaining jobs in 2022, three sectors had declines—the financial activities, the education and health services, and the other services sectors. The fastest decline was in the financial activities sector, down by 2,100 jobs, or 4.2 percent. An increase in home mortgage interest rates in 2022 contributed to a reduction in home sales and fewer mortgage applications, which led to a decline in employment in the consumer lending industry. Current Conditions—Unemployment The unemployment rate has been falling year over year during the past 2 years as economic conditions improved from the early 2020 recession. The 2022 rate is relatively similar to the late 2010s when the rate averaged 3.3 percent from 2017 through 2019. The decline in unemployment during 2022 was primarily because of a decline in the labor force, which was down by 7,300, or 0.9 percent, from a year earlier. The labor force declined each year from 2018 through 2020, down an average of 3,900, or 0.5 percent, annually and increased by 2,400, or 0.3 percent, in 2021, as some workers who temporarily left the labor force in 2020 returned. 12-Month Average Unemployment Rate in the Milwaukee HMA and the Nation Note: Based on the 12-month moving average. Nonfarm payrolls were at a historic high in 2000 but declined from 2001 through 2003 by an average of 13,200 jobs, or 1.5 percent, annually, with nearly three-fourths of job losses occurring in the manufacturing sector, which lost an average of 9,500 jobs, or 6.1 percent, a year. The education and health services sector was one of only four sectors to add jobs during the period. A period of payroll growth from 2004 through 2007—which averaged 6,500 jobs, or 0.8 percent, annually—supported a partial recovery. The education and health services sector added the most jobs, accounting for nearly 45 percent of job growth and becoming the largest employment sector in the HMA during 2006. Manufacturing jobs continued to decline from 2004 through 2007 but at a slower rate than during 2001 through 2003, with declines averaging 800 jobs, or 0.6 percent, a year. In 2007, payrolls peaked at jobs, which was 13,400 jobs, or 1.5 percent, below the historic peak in 2000. 2011 Through 2019 The 2010s were a period of economic recovery and expansion, but the pace of gains lagged behind those of the nation. Nonfarm payroll growth in the HMA averaged 7,400 jobs, or 0.9 percent, annually from 2011 through 2019, compared with the faster rate of 1.6 percent annually in the nation. Total nonfarm payrolls in the HMA surpassed 2007 levels in 2016, 2 years after the nation met a similar milestone in recovery from the Great Recession. In 2019, payrolls in the HMA surpassed the historic high reached in 2000. The manufacturing sector reversed the trend of declines that occurred during the 2000s, adding jobs during Source: U.S. Sector Growth in the Milwaukee HMA, 2011 to 2019 Total job growth was slower from 2016 through 2019, partially because of declines in the wholesale and retail, the professional and business services, and the government sectors. Dane County, which includes the city of Madison and is approximately 80 miles west of downtown Milwaukee, was the most common place to work outside the HMA, with 15,300 HMA residents holding jobs in the county (Map 1). Racine and Kenosha Counties were the second and third most common places to work outside the HMA, with 10,800 and 5,700 HMA residents working in those counties. Cook County, which includes the city of Chicago and is 90 miles south of downtown Milwaukee, drew 4,300 workers from the HMA in 2019. Nationally, about 5 percent of paid workdays were worked from home in 2019; the share increased to 62 percent in May 2020, averaged 34 percent in 2021, and declined to 30 percent in 2022 (WFH Research).

[Assistant] Forecast During the 3-year forecast period, nonfarm payrolls are expected to increase an average of 1.0 percent annually, moderating from gains during 2021 and 2022 but slightly above the average from the 2010s. Among the jobs lost in the March and April 2020 recession, most have either returned or are not expected to come back. However, some sectors, such as the leisure and hospitality sector, are still Map 1. Where Residents of the Milwaukee HMA Worked in 2019 Note: Excludes counties with 1,000 or fewer jobs worked by HMA residents. Source: U.S. Census Bureau OnTheMap, 2019 The number of days per week worked from offices is rising, and jobs to support office workers, especially those in the leisure and hospitality sector, are expected to increase. Companies in the HMA are moving from suburban offices to offices in downtown Milwaukee and are expected to add more workers. Milwaukee Electric Tool Corporation moved its offices from west suburban Brookfield to downtown Milwaukee earlier in 2022 and is expected to add up to 600 workers. Fiserv, Inc., plans to move 530 workers from Brookfield to downtown Milwaukee and add 250 workers at the downtown office. Several large healthcare facilities have expansion projects under construction, including the Children’s Wisconsin and Medical College of Wisconsin Cancer Research Center and are expected to add workers at the new facilities on completion in 2024.


[User] Population Trends In the Milwaukee HMA, population growth fluctuated in the 2000s, generally slowed from 2010 to 2020, and has shifted to decline since 2020. Net migration fluctuates based on economic conditions in the HMA and nation, with net out-migration occurring most years since 2000. Stronger net out-migration occurred in years when national economic conditions were relatively strong, and lower levels of net out-migration occurred in years when the national economy was weaker. Net natural change was relatively steady in the 2000s but has declined most years since 2010 because of a lower birth rate and an aging population. The COVID-19 virus has further accelerated the decline in net natural change since 2020. In the 2000s, relatively higher net natural change offset net out-migration, resulting in an average population increase of 5,500, or 0.4 percent, annually from 2000 to 2010 (Table 3). From 2010 Table 3. Milwaukee HMA Population and Household Quick Facts Population Quick Facts 2010 Current Forecast Population Average Annual Change Percentage Change 0.4 0.0 -0.1 Household Quick Facts 2010 Current Forecast Households Average Annual Change Percentage Change 0.6 0.5 0.3 Notes: Average annual changes and percentage changes are based on averages from 2000 to to current, and current to forecast. The forecast period is from the current date (January 1, 2023) to January 1, 2026. Components of Population Change in the Milwaukee HMA, 2000 Through the Forecast Notes: Data displayed are average annual totals. The forecast period is from the current date (January 1, 2023) to January 1, 2026. Sources: U.S. Census Bureau; current to forecast—estimates by the analyst to 2020, net natural change was lower, and net out-migration was higher compared with the previous decade. Population growth averaged 1,875, or 0.1 percent, annually from 2010 to 2020. Since 2020, net natural change has declined further, and net out-migration has increased, resulting in the population declining by an estimated average of 5,225, or 0.3 percent, annually. Population growth, including net migration and net natural change, averaged 5,850 from 2000 to 2003 and fell to 1,375 annually from 2003 to 2006. In the late 2000s, slower economic growth in the nation, the Great Recession, and the early period of recovery contributed to fewer residents leaving the HMA, and net out-migration fell to an average of 1,700 annually from 2006 to 2014. Population growth averaged 6,300 annually from 2006 to 2014 as fewer people moved away. In the mid-2010s, as the national economy shifted from recovery to expansion, net out-migration increased to an average of 6,750 people annually from 2014 to 2018, and the population declined by an average of 750 annually. Slowing economic growth in 2019 and the onset of the COVID-19 pandemic in 2020 contributed to a reduction in net out-migration, averaging 3,125 annually from 2018 to 2020, and the population increased by an average of 2,000 annually. Since the end of the 2020 recession, the national economy has been Sources: Population aged 65 or older—2010–2019 and 2021 American Community Survey 1-year data and 2020 estimates by the analyst; births per 1,000 residents—U.S. Senior Population and Births in the Milwaukee HMA recovering faster than the HMA. Net out-migration has averaged an estimated 6,650 people annually since mid-2020, and the population has declined by an average of 5,225 annually as more people moved away and net natural change declined sharply. Net Natural Change, the Birth Rate, and Senior Population In the 2000s, net natural change was relatively steady, but in the decade following the Great Recession, fewer births and an aging population led to a decline. Deaths from COVID-19 further accelerated the decline. From 2000 to 2010, net natural change averaged 8,675 people annually. From 2010 to 2019, net natural change declined by an average of nearly 400, or 6 percent, annually. In 2019, the birth rate declined to 12.0 births, and the population aged 65 or older increased to 16.1 percent of the total, or people. The onset of the COVID-19 pandemic further In 2021, the birth rate declined further, and the share of the population aged 65 or older increased. Since 2020, net natural change has averaged an estimated 1,425 people annually. Population by Geography Within the HMA, population growth from 2010 to 2020 was strongest in downtown Milwaukee and the closer-in areas of the suburban counties, including southern Ozaukee and Washington Counties and eastern Waukesha County (Map 2). The population had the sharpest decline on the north side of the city of Milwaukee. At the county level, all three suburban counties in the HMA have gained population since 2010, but Milwaukee County has lost population. Waukesha County had the largest gain, averaging 1,700 people, or 0.4 percent, annually from 2010 to 2020, (Table 4) and a relatively similar level of growth since 2020. Milwaukee County declined by an average of 820 people, or 0.1 percent, annually from 2010 to 2020, and the population has declined faster since 2020. The current estimated population of Milwaukee County accounts for 59 percent of the total HMA population, down from 61 percent in 2010 and 63 percent in 2000.

[Assistant] The population is expected to decline by an average of 1,325, or 0.1 percent, annually. Deaths from COVID-19 declined in the second half of 2022 and are expected to continue at lower levels during the 3-year forecast period, contributing to an increase in net natural change relative to the 2020-to-current period. Net out- migration is also expected to slow compared with the 2020-to-current period, partly because of the expected slowdown in the national economy in response to Federal Reserve policies. The forecast population decline is expected to be concentrated in Milwaukee County, offsetting expected gains in the three suburban counties.


[User] Household Trends and Forecast Household growth in the HMA has also slowed in recent years, reflective of slower population growth. From 2000 to 2010, the number of households increased by an average of 3,475, or 0.6 percent, annually. As net natural change fell throughout the 2010s and net out-migration was elevated in the mid-2010s and has been elevated again since 2020, household growth has slowed to an average of 2,875, or 0.5 percent, annually since 2010. At the county level, the number of households increased at a slower rate in Milwaukee County, up an average of 0.2 percent annually since 2010 compared with an average increase of 0.8 percent annually in the suburban counties.

[Assistant] Household growth is expected to average 2,200, or 0.3 percent, annually, a faster pace compared with population growth. Despite the expected population decline, the declining birth rate, which has contributed to a reduction in net natural change since 2010, has a limited effect on household growth because the generation born since 2010 has not yet reached their household formation years. At the county level, nearly all the household growth is expected to occur in the suburban counties, and the number of households in Milwaukee County is expected to be relatively unchanged. In Milwaukee County, gains are expected in the downtown Milwaukee area as the effects of the COVID-19 pandemic fade, but a decline in the number of households elsewhere in the county will offset those gains.


[User] Current Conditions: Calendar Year 2022 The home sales market in the Milwaukee HMA is currently slightly tight but easing from tighter conditions a year ago. Home sales market conditions were slightly soft in the early 2010s, when the inventory of homes for sale was elevated. The current home sales vacancy rate is estimated at 1.0 percent, down from 1.9 percent in 2010 ( New and existing sales include single-family homes, townhomes, and condominium units. Share of Overall Sales by Price Range During the 12 Months Ending December 2022 in the Milwaukee HMA Table 5. Home Sales Quick Facts in the Milwaukee HMA Home Sales Quick Facts Milwaukee HMA Nation Vacancy Rate 1.0% NA Months of Inventory 1.4 2.2 Total Home Sales -Year Change -16% -19% Total Home Sales Price -Year Change 8% 9% Mortgage Delinquency Rate 1.0% 1.2% NA = data not available. Notes: The vacancy rate is as of the current date; home sales and prices are for the 12 months ending December 2022; and months of inventory and mortgage delinquency data are as of December 2022. The current date is January 1, 2023. Sources: Vacancy rate—estimates by the analyst; months of inventory and mortgage delinquency rate— CoreLogic, Inc.; home sales and prices—Zonda was 1.4 months in 2022 compared with 1.3 months in 2021 and 1.5 months in 2020 (CoreLogic, Inc.). Inventory has declined since 2010, when it peaked at a 13.6-month supply, and has been below a 6-month supply since 2015. Home sales during 2022, including new and existing home sales, declined 16 percent from a year ago to 25,850, the fewest sales since 2015 (Zonda). During 2022, the average price for existing homes, which accounted for 97 percent of all sales, was and the average new home price was . Homes priced below were 32 percent of sales, and homes priced at and above were 25 percent of sales. Total home sales declined 32 percent to 5,150 homes sold compared with an average of 7,700 homes sold during the fourth quarters of 2021 and 2020. Home sales during the fourth quarter of 2022 were the lowest since 2015. The average home sales price increased 4 percent, compared with an average increase of 7 percent annually during the previous 2 years, but was similar to the average change during the fourth quarters from 2012 to 2019, when prices increased 4 percent annually. Housing Affordability Affordability of homebuying, as measured by the National Association of Home Builders/ Wells Fargo Housing Opportunity Index (NAHB/ HOI), has declined from a year ago. In the HMA, a household earning the local median family income could afford 63.2 percent of homes sold during the fourth quarter of 2022, down from 76.5 percent of homes for sale a year earlier. Nationally, the rates were 38.1 percent, down from 54.2 percent a year ago. The primary factor affecting affordability throughout the nation is the increase in the mortgage interest rate. Despite the reduction in affordability, the HMA is among the top 25 percent of the most affordable metropolitan areas in the nation, ranked 54th most affordable among 235 metropolitan areas during the fourth quarter of 2022 (NAHB/HOI). The HMA is ranked more affordable than the Madison and Chicago-Naperville-Elgin metropolitan areas, which have high levels of commuting and migration. As the economy recovered, total home sales increased by an average of 1,675, or 8 percent, annually from 2011 through 2016. The increase slowed to an average of 350, or 1 percent, annually from 2017 through 2019 as economic growth slowed. The onset of the COVID-19 pandemic in 2020 led to an increase in working from home and a decrease in mortgage interest rates, which both contributed to increased demand for homebuying. Home sales increased by an average of 2,000, or 7 percent, annually during 2020 and 2021 to a recent peak of 30,950 in 2021. Rising mortgage interest rates contributed to falling sales in 2022, down by 5,100, or 16 percent, to 25,850. Price growth accelerated at the onset of the COVID-19 pandemic, up an average of 8 percent, or $21,800, annually since 2020. The increase in mortgage interest rates had a limited effect on the average home sales price in 2022. Sales Construction Sales construction activity—as measured by the number of building permits for sales housing, including single-family homes, townhomes, and condominiums permitted—increased in response to the stronger demand for home sales at the onset of the COVID-19 pandemic. Permitting since 2020 has been above the average during the 2010s but below levels from the early 2000s when population growth was stronger, lending standards were looser, and competition from new construction apartments built for moderate- and upper-income households was less. In response to changing preferences and an increase in working from home at the onset of the COVID-19 pandemic, permitting increased by an average of 200 homes annually during 2020 and 2021 to a 14-year high of 2,075 in 2021. The rising mortgage interest rate and decline in home sales contributed to a decline in permitting during 2022, down by 225 homes, or 11 percent, to 1,850.

[Assistant] An increasing share of for-sale housing has been built in the three suburban counties in the HMA. Since 2020, homes built in the suburban counties have accounted for 90 percent of homes permitted, up from 87 percent from 2010 to 2019 and 73 percent from 2000 through 2009. Most land in Milwaukee County has already been developed, and little is available for new construction. One of a limited number of new developments in Milwaukee County is Lakeshore Commons, a 648-home master-planned community in Oak Creek on the shore of Lake Michigan. Approximately one-half of the planned units will be in apartment buildings, and one-half will consist of homes built for sale, including a mix of townhomes and single-family homes. Homes listed for sale range from for a two-bedroom, two-bathroom 1,700-square-foot townhome to for a four-bedroom, three-bathroom 2,100-square-foot single-family home with upgraded finishings. Arrowood, a 42-lot first phase of a larger subdivision in Oconomowoc, a far western suburb in Waukesha County, is more typical for the HMA. Homes listed for sale in the subdivision have three or four bedrooms, and prices range from to . The Oconomowoc 53066 ZIP Code, the location of Arrowood, had the most home sales of any ZIP Code among the three suburban counties in the HMA in 2022 and the most home sales among all ZIP Codes in the HMA in 2019 and 2020. Forecast During the 3-year forecast period, demand is expected for an additional 5,575 for-sale units ( The forecast period is from January 1, 2023, to January 1, 2026. Source: Estimates by the analyst


[User] Current Conditions Rental market conditions in the Milwaukee HMA are currently slightly tight compared with tighter conditions a year ago and slightly soft conditions in the 2010s. The vacancy rate for all rental units—including apartments, renter occupied single-family homes, townhomes, condominiums, and mobile homes—is currently estimated at 7.0 percent, down from 7.8 percent in 2010 ( Group Apartment Market Conditions by Geography In the Group-defined market areas, rent growth tended to be stronger in areas farther from downtown Milwaukee, and the vacancy rate tended to be lower in those areas (Maps 3a and 3b). The downtown Milwaukee market area is heavily affected by changes in employer work from home policies, and the average rent is well above the HMA average. As of the fourth quarter of 2022, the average rent in downtown Milwaukee increased 2 percent to $1,444, and the vacancy rate was 5.4 percent. In the remainder of the HMA, rent increased by an average of 4 percent, or 2 percentage points faster than the increase in downtown Milwaukee, and the average apartment vacancy rate was 3.8 percent, or 1.6 percentage points less than the downtown Milwaukee market area. One year earlier, the differences were larger (Maps 3c and 3d), with the average rent in the remainder of the HMA increasing 6 percentage points faster than in downtown Milwaukee, and the average vacancy rate was 1.9 percentage points lower in the remainder of the HMA. Permitting averaged 1,175 units annually from 2000 through 2009. Rental construction increased from 2010 through 2017 by an average of 400 units, or 21 percent, annually to a prepandemic high of 4,100 in 2017. Permitting moderated slightly in 2018 to 4,025, then declined to 2,600 in 2019 to allow for the absorption of units permitted during previous years. From 2020 through 2022, in response to low apartment vacancy and above average rent growth, permitting increased by an average of 570 units annually to 4,300 in 2022, which was the most units permitted since at least 2000. Rental construction has accounted for the majority of housing units permitted in the HMA since 2014. The rental units built were mostly apartments in established areas close to employment centers where surrounding land uses, land costs, and availability of land supported higher housing density construction. From 2010 through percent of all rental units permitted in the HMA were in Milwaukee County. However, with the increase in vacancy in downtown Milwaukee apartments at the onset of the pandemic, permitting shifted in 2021, with only 53 percent of units permitted in Milwaukee County. Permitting shifted back in 2022, with 66 percent of rental units permitted in Milwaukee County. Housing Affordability: Rental Rental housing is relatively affordable in the HMA, and affordability has generally been rising since 2011. Median renter incomes increased faster than gross rents most years during the past decade. As a result, the Gross Rent Affordability Index, which measures median renter household income relative

[Assistant] Forecast During the 3-year forecast period, demand is expected for an additional 9,075 units ( The forecast period is from January 1, 2023, to January 1, 2026. Source: Estimates by the analyst


[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. During March and April of 2020, more than 20.7 million jobs, or 14 percent of total jobs, were lost in the country as policies enacted to slow the spread of COVID-19 had a significant negative impact on the economy. Over time, policies were relaxed or eliminated, vaccines and other treatments were introduced, and the government enacted monetary and fiscal policies to help the economy recover. Total nonfarm payrolls have increased since May 2020. As of April 2022, nonfarm payrolls surpassed the level of jobs that existed in February 2020, the last month before the COVID-19 impact (monthly data, not seasonally adjusted). Despite total jobs fully recovering, not all sectors have fully recovered the jobs lost because of the pandemic.

[Assistant] During the next 3 years, nonfarm payrolls are expected to increase an average of 1.0 percent a year.


[User] The national sales housing market is tight, with an estimated 1.0 percent vacancy rate, down from 2.4 percent in 2010 when the market was soft. A shortage of sales housing continued in 2022, although the market is less tight than it was during the previous year. In 2022, the supply of existing homes for sale increased to 2.7 months, up from 2.3 months in 2021 (National Association of REALTORS® [NAR]). During the same period, the total number of homes sold was down 18 percent (Census Bureau/HUD; NAR). Despite the decline in sales, home prices continued to increase by double-digits in 2022; the median existing home sales price increased 10 percent, and the median new home sales price increased 15 percent compared with 2021. During the next 3 years, demand is estimated for 2.90 million sales units. The units already under construction will meet a portion of that demand. The national rental housing market is tight, with an estimated 5.4-percent vacancy rate, down from 9.2 percent in 2010 when the market was soft. The apartment market, which makes up more than one-half of the rental supply in the nation, is slightly tight with a 6.3-percent vacancy rate as of the fourth quarter of 2022. Year over year, the average monthly apartment rent increased 4 percent to $1,612 as of the fourth quarter of 2022, which was a significant slowdown from the year-over-year increase of 12 percent measured in the fourth quarter of 2021 ( Group). For the past 2 years, the pace of rental construction has been extremely high, and the completion of these units has helped relieve some of the rental housing shortage. Demand for rental units during the next 3 years is estimated at 2.15 million units. The rental units already under construction will satisfy a portion of that demand. Sales Market Tight: Home prices continued to increase in 2022, albeit at a slower rate than in 2021.

[Assistant] Units under construction as of January 1, 2023. The forecast period is January 1, 2023, to January 1, 2026. Source: Estimates by the analyst


[User] Long-Term Economic Trends From 2001 through 2019, nonfarm payrolls in the nation grew 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 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 gained jobs in 2021. During 2022, nonfarm payrolls increased significantly, and the annual average total number of jobs surpassed the average level of jobs that existed in 2019, the last year before the COVID-19 impact. Note: 12-month moving average. Sources: U.S. 12-Month Average Nonfarm Payrolls in the Nation Current Conditions Job gains were strong during 2022.

[Assistant] Total nonfarm payrolls increased 4.3 percent, or by 6.29 million jobs relative to 2021, which was the fastest rate of growth since the 4.7-percent rate during 1984 ( U.S. The accommodation and food services industry accounted for nearly 81 percent of the new jobs in the sector as more restaurants, bars, hotels, and vacation destinations continued to move toward their prepandemic levels of activity. The professional and business services sector gained 1.19 million new jobs, or 5.5 percent, as companies across the country continued to reopen offices. E-commerce sales remained strong in 2022, representing 16 percent of total sales during the fourth quarter, relatively unchanged from the fourth quarter of 2021 (U.S. Census Bureau News, Quarterly Retail E-Commerce Sales, U.S. Department of Commerce, February contributing to the 7.7-percent increase, or new jobs, in the transportation and utilities sector. Other sectors with gains of 3.0 percent or more included information; mining, logging, and construction; manufacturing; education and health services; and other services. Real gross domestic product (GDP) increased 2.1 percent during 2022, which is slightly higher than the average pace from 2001 through .0 percent but lower than the longer-term average trend of 3.0 percent since 1960 (U.S. Bureau of Economic Analysis). After declining by 1.6 and 0.6 percent during the first and second quarters of 2022, real GDP grew by 3.2 and 2.7 percent in the third and fourth quarters, respectively. Price increases averaged 8.0 percent during 2022, up from 4.7 percent during 2021, and were at the highest level since the 10.3-percent increase in 1981 (Consumer Price Index for All Urban Consumers [CPI-U], Bureau of Labor Statistics). By comparison, the rate of inflation averaged 2.1 percent from 2000 through 2021, which is slightly higher than the 2.0-percent target rate for the Federal Reserve System (the Fed). In an effort to reduce the high inflation of the past 2 years, the Fed raised the effective federal funds rate in 2022 from 0.08 percent at the beginning of the year to 4.33 percent by the end of the year. The higher interest rate has made new loans, including mortgages, more expensive. Current Conditions— Regional Nonfarm Payrolls The number of jobs increased in all 10 HUD regions during 2022, ranging from 2.5 percent in the Great Plains region to 5.6 percent in the Pacific region (Map 1). The leisure and hospitality and professional and business services sectors added the most jobs in every region of the country. The leisure and hospitality sector, which lost the most jobs as a result of the COVID-19 pandemic, accounted for the most jobs added in every region during 2021. The trend nearly repeated in 2022, with the leisure and hospitality sector leading job gains in all regions except in the Southwest region, where the professional and business services sector added the most jobs. In the other Map 1. Nonfarm Payroll Growth by HUD Region, 2021–22 nine regions, the professional and business services sector added the second largest number of jobs, and leisure and hospitality added the second most in the Southwest region. Gains in the leisure and hospitality sector ranged from 44,900 jobs, or 7.3 percent, in the Great Plains region to jobs, or 16.2 percent, in the Pacific region. The gains in the Pacific region represented the second largest percentage gain in the sector among regions, behind the 17.9-percent increase, or jobs, in the New York/New Jersey region. Additions in the professional and business services sector ranged from 30,700 jobs in the Great Plains region, or 3.8 percent, to jobs, or 6.5 percent, in the Southeast/Caribbean region. Nonfarm payroll growth was below the national average gain of 4.3 percent in the remaining five regions during 2022. Gains of 3.7 percent occurred in the Rocky Mountain region, with mining, logging, and construction sector jobs up by 24,900, or 5.3 percent. The New England region grew 3.5 percent in 2022, with the third largest number of gains in the education and health services sector, which was up by 29,100 jobs, or 1.9 percent. The education and health services sector also added the third largest number of jobs in the Mid-Atlantic region, up by 58,600 jobs, or 2.3 percent, contributing to total payroll gains of 3.3 percent in the region. Jobs in the Midwest and Great Plains regions were up 3.2 and 2.5 percent, respectively, with the manufacturing sector adding the third largest number of jobs in each region at 92,500, or 3.0 percent, and 28,900, or 3.9 percent, respectively. Progress of the Recovery By April 2022, on a monthly basis, the national economy recovered all of the nearly 21 million jobs that were lost in March and April of 2020 as a result of the COVID-19 pandemic (monthly, not seasonally adjusted). Map 2 shows the percent of nonfarm payrolls recovered at the state level by the end of 2022 Map 2. Percent of Nonfarm Payroll Jobs Recovered by December 2022 Current Conditions— Unemployment During 2022, the unemployment rate averaged 3.6 percent, down from an average of 5.3 percent in 2021 and equivalent to the rate prior to the COVID-19 impact. It was the lowest yearly rate since the 3.5-percent average in 1969. 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 3.6 percent during the 12 months ending February 2020. As a result of the COVID-19 recession, the unemployment rate rose to a high of 8.7 percent during the 12 months ending March 2021. The number of unemployed people rose from an average of 6.00 million in 2019 to an average of 12.95 million in 2020, the highest yearly total since an average of 13.75 million people were unemployed in 2011. During 2021, the number of unemployed people declined to an average of 8.62 million and further declined to an average of 6.00 million during 2022. Large fluctuations in the labor force have also occurred in the past couple of years. During 2020, the labor force declined by 2.80 million from 2019. Approximately people returned to the labor force in 2021. During 2022, the labor force increased by 3.08 million people to an annual average of 164.29 million, the largest ever in the history of the country. Note: Based on the 12-month moving average. Source: U.S. 12-Month Average Unemployment Rate in the Nation 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 26 percent compared with an average annual level of $909 billion from 2002 through 2004 (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, 2008 Through 2010: The Great Recession The Great Recession officially lasted from December 2007 through June 2009, or 18 months (National Bureau of Economic Research). It was the longest recession since the Great Depression, which lasted 43 months from 1929 to 1933. The impacts from the Great Recession on the labor market lasted well into 2010. From 2008 through 2010, nonfarm payrolls in the country declined by an average of 2.55 million, or 1.9 percent, annually, and the nation lost 7.6 million jobs. With the exceptions of the education and health services and the government sectors, every sector lost jobs. The education and health services sector increased by an average of jobs annually, or 2.3 percent, and the government sector remained relatively stable, with modest growth averaging 90,700 new jobs, or 0.4 percent, annually. The most significant declines occurred in the goods-producing sectors. The manufacturing sector was down an average of jobs, or 6.0 percent, annually, and the mining, logging, and construction sector lost an average of jobs, or 9.3 percent, each year. Most notably, the construction subsector declined an average of 10.1 percent, or by jobs, annually during this period because of significant declines in both residential and commercial construction. The nominal annual value of construction reached a trough from 2008 through 2011, when it averaged $897 billion, down 21 percent from the 2005-through-2007 average. Most remaining sectors had average annual declines ranging from 2.3 to 3.7 percent, with even smaller declines in the leisure and hospitality and the other services sectors. The wholesale and retail trade sector was down by an average of jobs, or 2.6 percent. The professional and business services sector declined by an average of jobs, or 2.3 percent. 2011 Through 2016: Recovery and 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 38,700 jobs, or 0.2 percent, partly reflecting growth in e-commerce. Average losses of 72,600, or 0.5 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. Source: U.S. Sector Growth in the Nation, 2011 to Current 2020: COVID-19 and the Recession Every nonfarm payroll sector declined during 2020 as countermeasures designed to reduce the spread of COVID-19 were put in place. While the recession officially only lasted during March and April, the impacts were significant. Nonfarm payrolls declined by 8.72 million, or 5.8 percent, during 2020. Approximately 39 percent of the total losses during the year were in the leisure and hospitality sector, which was down 3.44 million jobs, or 20.7 percent. 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. 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 accounted for only 9 percent of all jobs during 2020. The professional and business services sector was down by jobs, or 4.5 percent, with many companies operating on full telework status. The education and health services sector lost jobs, or 3.7 percent, with many nonessential services and surgeries canceled. The retail trade subsector lost jobs, or 4.8 percent, with many stores facing temporary (or in some cases, permanent) closures. Manufacturing sector jobs were down 5.1 percent, or by jobs. The government sector also had significant declines of jobs, or 2.8 percent, with all the losses at the state and local levels, whereas the federal subsector added 99,000 jobs, or 3.5 percent. 2021: Beginning of the Recovery The recovery officially began in May 2020 after 2 months of extraordinary job losses in March and April. During 2021, total nonfarm payrolls increased 2.9 percent, or by 4.10 million jobs. The largest gain occurred in the professional and business services sector, which added 1.01 million jobs, or 5.0 percent, as many companies began to return to some form of in-person work, resulting in a greater demand for support services. The fastest rate of growth during 2021 occurred in the transportation and utilities sector, at 8.2 percent, or new jobs. Included in this sector are distribution centers, which grew in number and size to support an increase in e-commerce that accelerated in response to the pandemic. E-commerce sales increased 47 percent during the first quarter of 2021 relative to the previous year (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 Growth is anticipated to be strongest in the first year and gradually slow in years 2 and 3. The Fed is likely to continue raising the federal funds rate during 2023, or at least keep it at an elevated level, to reduce inflation which will have a cooling effect on economic growth. The leisure and hospitality sector is expected to have significant growth as it continues to recover the jobs lost during the COVID-19 pandemic. Growth is likely to continue to be strong in the professional and business services sector as well. The transportation and utilities sector is also expected to continue to have strong gains with the increasing popularity of e-commerce.


[User] 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. The leisure and hospitality sector added 1.00 million jobs, or 7.6 percent, during 2021. Approximately 78 percent of the sector gains in 2021 were in the accommodation and food services industry; restaurants reopened and people began to resume travel. In 2021, there were 14.10 million jobs in the leisure and hospitality sector, still down 2.44 million jobs, or 15 percent, from the recent high in 2019. Real GDP increased 5.9 percent during 2021 after declining 2.8 percent in 2020. The annual rate of inflation averaged 4.7 percent during 2021 based on the CPI-U, which was the highest in the country since the 5.4-percent rate in 1990. 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 (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. The average level of net in-migration increased to 1.13 million people a year from 2010 to 2016 as the economy added jobs, 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. Population growth continued to slow to an average annual rate of 0.5 percent, or 1.79 million people, from 2016 to 2020. Net in-migration slowed to an average of people a year and accounted for 47 percent of the population gains during the period, and net natural change declined to an average of people, or 53 percent of growth. As a result of the impacts of COVID-19 and the policies enacted to contain its spread, including policies that had the effect of restricting immigration to the United States, both net natural change and net in-migration slowed considerably from 2020 to 2021, resulting in the overall population growing 0.2 percent. Net in-migration declined to and net natural change decreased to largely because of the significant increase in COVID-19-related deaths. Since 2021, many of the COVID-19-related policies regarding immigration have been lifted, and population growth has increased by an average annual rate of 0.4 percent, with net in-migration averaging 1.11 million and net natural change averaging .

[Assistant] During the 3-year forecast period, the population is expected to increase at an average annual rate of 0.5 percent, or approximately 1.78 million people each year. Net natural change and net-in migration are expected to average and 1.03 million people a year, respectively. The population is expected to total 339.57 million by the end of the forecast period (Table 2). Table 2. Population and Household Quick Facts for the Nation Population Quick Facts Type010 Current Forecast Population Average Annual Change Percentage Change 0.9 0.6 0.5 Household Quick Facts 2010 Current Forecast Households Average Annual Change Percentage Change 1.0 0.8 0.7 Notes: Average annual changes and percentage changes are based on averages from 2000 to to the current date, and the current date to the end of the forecast period. The forecast period is from the current date (January 1, 2023) to January 1, 2026. Sources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—estimates by the analyst


[User] Mexico has consistently accounted for 14 percent of immigration each year since 2010. India accounted for a total of 6 percent of all immigration from 2010 to 2020, whereas China accounted for 7 percent of immigration from 2010 to 2019 and 6 percent during 2020. During 2021, approximately 8 percent of immigrants to the U.S. came from Europe, down from 10 percent in 2020. Approximately 38 percent of all immigrants came from Asia during 2021, a relatively unchanged percent since 2010. Immigrants from South America accounted for 9 percent of all immigrants during 2021, unchanged from 2020. Similarly, immigrants from Africa also accounted for 9 percent of immigrants, down from 11 percent in 2020. 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 27.0 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 24.9 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 14.8 percent of the total population, but by 2021 it had grown to 19.0 percent of the population. That increase helps explain the steady growth in healthcare-related jobs throughout the country, because this age group tends to be a major consumer of health services. The 80-and-older age group remained relatively stable during the period, accounting for 3.7 percent of the total population in 2010 and 3.9 percent in 2021.

[Assistant] Notes: Data are average annual totals. The forecast period is from the current date (January 1, 2023), to January 1, 2026. Sources: U.S. Components of Population Change in the Nation, 2000 Through the Forecast Source: 2010 and 2021 U.S. Population by Age Range in the Nation


[User] Map 3 shows the population growth rates by region. The national population increased by 0.4 percent during that period. The highest rate of growth among the HUD regions occurred in the Southeast/ Caribbean region, at 1.3 percent, followed by the Southwest region at 1.1 percent. The population increased 0.8 percent in the Rocky Mountain region, followed by a 0.4-percent increase in the Northwest region. The rate of population growth was 0.1 percent in both the New England and the Great Plains regions. In the Pacific region, the population remained relatively unchanged, but the population in both the Mid-Atlantic and Midwest regions declined slightly by 0.1 percent. The largest decline occurred in the New York/New Jersey region, which was down by 0.6 percent. Household Trends The number of households in the United States is currently estimated at 128.81 million, representing an average annual increase of 0.8 percent, or households each year, 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 each year, due largely to higher population growth compared with the 2010s. Since 2010, owner households have increased 0.7 percent a year, and renter households have Map 3. Population Growth by HUD Region, 2021–22 Source: U.S. Census Bureau Population Estimates Program increased 0.8 percent a year, compared with respective rates of 0.9 and 1.3 percent from 2000 to 2010. During the housing boom of the 2000s, owner household growth was faster than renter household growth, increasing the homeownership rate significantly. After the housing bubble burst and the economy entered the Great Recession, renting became more common, and the homeownership rate declined. In part, that shift occurred because younger households have been delaying homeownership compared with previous generations. The homeownership rate in the country has declined to an estimated 64.8 percent, down

[Assistant] Households by Tenure and Homeownership Rate in the Nation Note: The current date is January 1, 2023. Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by the analyst from 65.1 percent in 2010 and down from a peak of 69.0 percent in 2004. Currently, an estimated 83.47 million owner households and 45.38 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, with population growth slightly lower than the average annual rate from 2010 to the current date. From 2010 to the current date, it is estimated that approximately 30,400 households switched tenure from owner to renter status (household tenure shift) each year. During the forecast period, this trend is likely to continue but at a slightly reduced pace of 20,000 households per year. It is anticipated that future household formation will be influenced by rising international immigration and the growing younger age cohort of 20 to 39 year olds, of which both groups tend to have a stronger demand for rental rather than owner units.


[User] Current Conditions The national home sales market eased somewhat in 2022 when a rapid increase in mortgage rates had a negative effect on the demand for sales housing. The market was still tight for the year, however, with an estimated sales vacancy rate of 1.0 percent. Although the level of available housing inventory is still historically low, the number of homes for sale was up 10 percent from December 2021 to December 2022. New and existing home sales declined 16 and 18 percent, respectively, from 2021 to 2022 (Census Bureau/HUD; NAR). Along with declining inventory and home sales, home prices continued to rise in 2022 compared with the previous year. Median sales prices increased 10 percent for existing homes and 15 percent for new homes ( Seriously delinquent mortgages are those that are 90 or more days delinquent or in foreclosure. Source: CoreLogic, Inc. Seriously Delinquent Mortgages and REO Properties The severe economic shock to the nation at the beginning of the pandemic caused the percentage of seriously delinquent mortgages and real estate owned (REO) properties to increase rapidly. Since then, as the economy recovered, the share of mortgages in this category has declined at a steady pace. The latest rate is below the prepandemic low of 1.3 percent in February 2020. The increase in the share of seriously delinquent mortgages and REO properties in 2020 was steeper than the increase during the housing crisis of the late 2000s, but the 2020 peak was significantly lower than the high of 8.6 percent reached in January 2010. The substantial increase in the rate of seriously delinquent mortgages and REO properties in 2020 was due entirely to increases in mortgages that were 90 or more days delinquent and not increases of foreclosures and REOs. In December 2020, the number of mortgages that were 90 or more days delinquent was up 313 percent year over year, whereas foreclosures and REO properties were down 31 percent and 61 percent, respectively. Current Regional Highlights The sales housing markets in the 10 HUD regions had mixed conditions during the fourth quarter of 2022, ranging from balanced to tight. The Southeast, Rocky Mountain, and Pacific regions all had a mix of balanced to slightly tight markets. The Southwest region had a mix of balanced to tight markets, whereas the remaining HUD regions had varying degrees of tight conditions. During the past year, the easing of sales markets nationwide was evident in the state-level changes in average home sales prices. In 2021, there were 6 states where average home prices increased less than 10 percent year over year, whereas in 2022 there were 25 states where average home prices increased less than 10 percent. The Pacific region led home price growth in the past year, with price increases of 16 percent in Arizona and California, 13 percent in Hawaii, and 9 percent in Nevada. The states with the lowest price growth in 2022 were Wisconsin (Midwest region) and Wyoming (Rocky Mountain region), where the average home sales price National Home Sales Sources: National Association of REALTORS®; U.S. Census Bureau/HUD increased 2 percent. 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 because mortgage lending standards were more relaxed and more mortgages were issued to riskier borrowers, which helped to inflate home sales and prices. 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 (Census Bureau/HUD; NAR). 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. 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 21 percent, and existing home sales declined at an average annual rate of 17 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. As the COVID-19 pandemic began, existing home sales increased at a faster rate from 2020 through 2021, averaging 7 percent a year, whereas new home sales slowed slightly to an average increase of 6 percent a year. Sales of both new and existing homes dropped in 2022, decreasing 18 and 16 percent, respectively. The median existing home sales price increased an average of 8 percent a year from 2001 through the peak in 2006, while the median new home sales price peaked a year later, increasing an average of 6 percent a year from 2001 through 2007 (Census Bureau/HUD; NAR). 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, the extended decline in existing home sales prices compared to new home sales prices 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 (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 2022, the median price for new and existing home sales each increased an average of 12 percent annually. Note: New and existing sales include single-family homes, townhomes, and condominium units. Share of Overall Sales by Price Range During 2022 in the Nation Sources: National Association of REALTORS®; U.S. National Home Sales Prices Annual Sales Permitting Activity in the Nation Sources: U.S. 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, representing a decline of 38 percent from the previous period. Sales building activity stabilized at low levels from 2009 through 2011, with 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. For the next 2 years, sales construction increased by an average of 12 percent a year to approximately 1.15 million sales units permitted in 2021, the highest level since 2006. As home sales declined from 2021 through 2022, the number of sales units permitted decreased 12 percent. Housing Affordability: Sales The affordability of owning a home in the United States varies significantly depending on geography, but homeownership in general has become less affordable during the past decade. The HOI declined by 16.1 percentage points in the past year alone because of higher mortgage rates and home prices.

[Assistant] HUD First-Time Homebuyer Affordability Index for the Nation NAHB = National Association of Home Builders. 4Q = fourth quarter. NAHB/Wells Fargo Housing Opportunity Index for the Nation Forecast During the forecast period, housing demand is expected to be relatively strong, totaling 2.90 million sales units during the 3-year forecast period ( The forecast period is from January 1, 2023, to January 1, 2026. Source: Estimates by the analyst


[User] Current Conditions and Recent Trends The national rental market is tight, with an estimated vacancy rate of 5.4 percent—down from 9.2 percent in 2010 when the market was soft ( 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 from January 1, 2023, to January 1, 2026. Source: Estimates by the analyst Table 8. Demand for New Rental Units in the Nation During the Forecast Period declined significantly from 2019 through 2021 because of a slowdown in income growth and a higher increase in the median gross rent. Many renter households in the United States face some degree of cost burden, meaning they pay more than 30 percent of their income on rent. During the 2015-through-2019 period, an estimated 21.7 percent of all renter households in the nation had moderate to high cost burdens, spending between 31 and 50 percent of their income on rent, whereas 22.2 percent were severely cost-burdened, spending more than 50 percent of income toward rent (Table 6). Very low-income renter households face significantly higher cost burdens. For renter households with incomes less than 50 percent of the Area Median Family Income, 27.5 percent experienced moderate to high cost burden, and 47.4 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 2.4 million HCVs in 2022, representing an increase of more than 15 percent from 2010 (HUD’s Picture of Subsidized Households). The average monthly subsidy has increased 0.9 percent since 2010, whereas the monthly tenant contribution has decreased 4.0 percent (Table 7). Despite more than 4.5 million American households receiving rental assistance, funding limitations prevent three out of four eligible households from receiving housing assistance.

[Assistant] In the United States, approximately people were homeless in 2022, and 40 percent were unsheltered homeless (2022 Point-in-Time Count). The two states with the highest populations, California and New York, accounted for 42 percent of the homeless population in the nation. Although 67 percent of the homeless population in California were unsheltered, only 5 percent of the homeless population in New York were unsheltered. Forecast During the 3-year forecast period, rental demand is expected to remain strong, especially if mortgage rates continue to rise and increase the cost of homeownership. Demand for approximately 2.15 million rental units is expected nationwide for the next 3 years (Table 8). This level of demand is lower than the pace of rental unit construction during the past few years after accounting for nonpermitted additions to the rental supply. 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] 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 analysis uses a methodology developed by HUD’s Economic and Market Analysis Division (EMAD) as described in detail here.

[Assistant] In EMAD methodology, the ideal production level during the forecast period is one that brings the sales and rental markets into balance. Although supply and demand are dynamic across these tenure types, the methodology bifurcates sales and rental markets so that EMAD economists can provide forecasts of rental demand to the Federal Housing Administration (FHA) for their work in reviewing applications for mortgage insurance on rental properties. This report discusses select data for the 10 HUD regions defined in the “Terminology Definitions and Notes” section at the end of the report.


[User] Job gains continued at a slower pace of 2.3 percent during 2023 compared with the increase of 4.3 percent, or 6.29 million jobs, during 2022. Despite the slowdown during the past year, job growth remained elevated compared with the average increase of 1.6 percent a year from 2011 through 2019. Annual growth in real gross domestic product (GDP) was strong during the fourth quarter of 2023, whereas the rate of inflation slowed significantly during 2023. During the next 3 years, nonfarm payrolls are expected to increase an average of 1.5 percent a year. The national sales market became slightly tight in 2023 after being tight during the previous 2 years. The supply of existing homes for sale increased from 2.7 months in 2022 to 3.1 months in 2023, and the inventory of existing homes for sale increased 4 percent during the same period (National Association of REALTORS® [NAR]). Year over year, total home sales were down 16 percent (NAR; Census Bureau/HUD). Despite the decline in home sales, the median sales price for existing homes increased 1 percent. The median price for new home sales decreased 7 percent. During the next 3 years, demand is estimated for 3.23 million sales units. The units already under construction will meet a portion of that demand. The national rental housing market is soft, with an estimated 8.9-percent vacancy rate, up from 7.5 percent in 2020. The apartment market, which makes up more than one-half of the rental supply in the nation, is also soft, with a 7.5-percent vacancy rate in 2023, up from 6.5 percent in 2022 ( Group). The average effective rent for apartments increased 1 percent in the past year to $1,646. By comparison, rent growth averaged 7 percent a year during the previous 2 years. The number of rental units permitted was at record highs in the 2 years following the pandemic and has contributed to an excess in the supply of rental units. Demand for rental units during the next 3 years is estimated at units. The rental units already under construction will satisfy all of that demand. Rental Market Soft: The average apartment vacancy rate is at its highest level in more than 20 years. Sales Market Slightly Tight: Home sales declined in 2023 as higher mortgage rates lessened the demand for sales housing.

[Assistant] Units under construction as of January 1, 2024. The forecast period is January 1, 2024, to January 1, 2027. Source: Estimates by the analyst


[User] Long-Term Economic Trends Although the Great Recession officially lasted from December 2007 through June 2009, the U.S. economy continued to lose jobs through 2010. The economy then underwent a lengthy recovery that lasted through 2014, followed by an expansion through 2019. With the impact of the COVID-19 pandemic and the countermeasures implemented to contain the spread of the virus, the economy lost a significant number of jobs in early 2020. As vaccines for COVID-19 became widely available and most of the countermeasures were lifted, the economy gained jobs in 2021. During 2022, nonfarm payrolls increased significantly, and the average number of jobs surpassed the average level of jobs in 2019, the last year before the pandemic. Recovery transitioned to growth during 2022. Although job growth slowed in 2023 compared with 2022, the rate remained elevated relative to the 2011-through-2019 period. Current Conditions Strong job growth continued during 2023 but at a slower pace than during the previous year. Total nonfarm payrolls increased 2.3 percent during 2023, or by 3.57 million jobs, following a gain of 4.3 percent during 2022 ( U.S. Share of Nonfarm Payroll Jobs in the Nation, by Sector jobs in the sector. Other sectors with notable gains include the government sector, up by jobs, or 2.5 percent, and the mining, logging, and construction sector, up by jobs, or 3.0 percent. Real GDP increased at a seasonally adjusted annual rate of 3.2 percent during the fourth quarter of 2023, compared with 2.6 percent a year ago. The current rate is above the longer-term average of 3.0 percent since 1960 (U.S. Bureau of Economic Analysis). Real GDP has increased for 6 consecutive quarters after declining by 2.0 and 0.6 percent during the first and second quarters of 2022, respectively. The rate of inflation slowed significantly during 2023 compared with the previous 2 years. During 2021 and 2022, the year-over-year rate of inflation Louis). The rate of inflation declined to 3.7 percent during 2023, remaining higher than the 2.0-percent target rate for the Federal Reserve System (the Fed). In an effort to reduce the high inflation of the past 3 years, the Fed raised the effective federal funds rate from 0.08 percent at the beginning of 2022 to 5.33 percent by August of 2023. The rate remained unchanged through the end of the year. The higher interest rate has made new loans, including mortgages, more expensive. Current Conditions— Regional Nonfarm Payrolls The number of jobs increased in all 10 HUD regions during 2023, ranging from 1.7 percent in the Great Lakes region to 3.2 percent in the Southwest region (Map 1). The leisure and hospitality sector was the fastest growing sector in the United States during 2023, a trend that was mirrored in nearly every region. In 7 of the 10 HUD regions, the highest rate of nonfarm payroll growth occurred in the leisure and hospitality sector. The exceptions were in the New England and the Southeast/Caribbean regions, which were led by the education and health services sector with rates of 3.2 and 5.3 percent, respectively, and the Southwest region, which was led by the mining, logging, and construction sector at 5.3 percent. The rates of growth in the leisure and Map 1. Nonfarm Payroll Growth by HUD Region, 2022–23 hospitality sector ranged from 3.1 percent, or 22,300 jobs, in New England to 5.9 percent, or 73,100 jobs, in New York/New Jersey. The largest numerical gain in the number of jobs in the leisure and hospitality sector was or 4.8 percent, in the Southeast/Caribbean region, followed closely by jobs, or 5.7 percent, in the Pacific region. The education and health services sector increased 5.3 percent in the New York/New Jersey region, similar to the Southeast/Caribbean region. The lowest rate of gain in this sector occurred in the Rocky Mountain region, up 2.7 percent. Growth was led by a gain of 3.2 percent, or jobs, in the Southwest region. In addition to the gain of 5.3 percent, or 72,700 jobs, in the mining, logging, and construction sector, the next two fastest growing sectors in the region were education and health services at 4.6 percent, or jobs, and leisure and hospitality at 4.2 percent, or 83,700 jobs. Jobs increased 2.7 percent in the Northwest region, where jobs were added to the economy. The leisure and hospitality sector was up 5.1 percent, or by 33,100 jobs, followed by a 5.0-percent gain in the education and health services sector with the addition of 49,600 jobs. The Southeast/Caribbean region was close behind with a growth rate of 2.6 percent, or jobs. The 5.3-percent gain in the education and health services sector represented an increase of jobs. Growth in the Pacific region matched the national gain at 2.3 percent, with jobs added. In addition to the aforementioned job growth in the leisure and hospitality sector, the education and health services sector grew 5.2 percent, or by jobs. Nonfarm payrolls in the remaining six regions grew at rates below the national average, ranging from 1.7 percent in the Great Lakes region to 2.0 percent in the New England, New York/New Jersey, and Mid-Atlantic regions. The New England region added jobs during 2023. The education and health services sector led the rates of growth in New England, up 3.2 percent, or by 49,500 jobs. The New York/New Jersey and the Mid-Atlantic regions added and jobs, respectively. The New York/New Jersey and Mid-Atlantic regions were both led by the leisure and hospitality sector, up 5.9 percent, or by 73,100 jobs, and 4.6 percent, or by 62,400 jobs, respectively. Similarly in both regions, the education and health services sector had the second highest rate of growth at 5.3 percent in the New York/ New Jersey region, with jobs added, and 3.7 percent in the Mid- Atlantic region, reflecting an increase of 97,200 jobs. Payrolls in the Rocky Mountain region grew 1.9 percent, or by jobs, during 2023. The mining and logging subsector grew 7.5 percent, or by 5,300 jobs. The rate of job growth in the Great Plains region was 1.8 percent, with jobs, led by a 4.3-percent increase, or 28,200 jobs, in the leisure and hospitality sector. The Great Lakes region added jobs during 2023. In addition to the 4.5-percent growth, or jobs added to the leisure and hospitality sector, the mining, logging, and construction sector had the second highest rate of growth at 3.7 percent, or 40,500 jobs. Current Conditions—Unemployment During 2023, the unemployment rate averaged 3.6 percent, unchanged from a year ago. 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 3.6 percent during the 12 months ending February 2020. As a result of the COVID-19 recession, the unemployment rate rose to a high of 8.7 percent during the 12 months ending March 2021. The number of unemployed people rose from an average of 6.00 million in 2019 to an average of 12.95 million in 2020, the highest yearly total since an average of 13.75 million people were unemployed in 2011. During 2021, the number of unemployed people declined to an average of 8.62 million and further declined to an average of 6.00 million during 2022. The number of unemployed rose slightly during 2023 to 6.08 million. Large fluctuations in the labor force have also occurred in the past couple of years. During 2020, the labor force declined by 2.80 million from 2019. Approximately people returned to the labor force in 2021. During 2022 and 2023, the labor force increased by 3.08 million and 2.83 million people, respectively, to an average of 167.12 million in 2023, the largest ever in the history of the country. The economy did not fully recover all of the jobs lost from 2008 through 2010 until 2014. Job gains occurred every year from 2011 through 2019; however, job growth was strongest through 2016. 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. 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 unemployment rate, averaging 4.0 percent during the period, and some job openings were difficult to fill. Every sector added jobs during the 3 years except the wholesale and retail trade sector, which declined by an average of 38,700 jobs, or 0.2 percent annually, partly because shopping at brick- and-mortar stores continued to lose popularity compared to online shopping. Average annual losses of 72,600, or 0.5 percent, in the retail trade subsector more than offset the average annual 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, Note: Based on the 12-month moving average. Source: U.S. 12-Month Average Unemployment Rate in the Nation 2020: COVID-19 and the Recession Every nonfarm payroll sector declined during 2020 as countermeasures designed to reduce the spread of COVID-19 were put in place. Although the recession only lasted during March and April, the impacts were significant. Nonfarm payrolls declined by 8.72 million, or 5.8 percent, during 2020. Approximately 39 percent of the total losses during the year were in the leisure and hospitality sector, which was down 3.44 million jobs, or 20.7 percent. 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. 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 accounted for only 9 percent of all jobs during 2020. The professional and business services sector was down by jobs, or 4.5 percent. The education and health services sector lost jobs, or 3.7 percent, with many Note: Current data are 2023 annual data. Source: U.S. Sector Growth in the Nation, 2011 to Current nonessential services and surgeries canceled. The retail trade subsector lost jobs, or 4.8 percent, with numerous stores facing temporary (or, in some cases, permanent) closures. Manufacturing sector jobs were down 5.1 percent, or by jobs. The government sector also had significant declines of jobs, or 2.8 percent, with all the losses at the state and local levels, whereas the federal subsector added 99,000 jobs, or 3.5 percent. 2021 and 2022: The Recovery The recovery began in May 2020 after 2 months of extraordinary job losses in March and April. During 2021, total nonfarm payrolls increased 2.9 percent, or by 4.10 million jobs, and then rose by 4.3 percent, or 6.29 million jobs, during 2022. The largest gain during the 2-year period occurred in the leisure and hospitality sector, which increased by an average of 1.34 million jobs, or 9.7 percent, annually. Nearly 80 percent of the job gains in the sector were in the accommodation and food services industry as people returned to their prepandemic lifestyles, including eating at restaurants and resuming travel. The professional and business services sector added an average of 1.10 million jobs, or 5.3 percent, a year as many companies resumed The second fastest rate of growth during the 2-year period occurred in the transportation and utilities sector, averaging an increase of 8.0 percent, or jobs, each year. Included in this sector are distribution centers, which grew in number and size to support an increase in e-commerce that accelerated in response to the pandemic. Year-over-year e-commerce sales were up 47 percent as of the first quarter of 2021 (U.S. Census Bureau News, Quarterly Retail E-Commerce Sales, U.S. Department of Commerce, May . Gains in e-commerce have continued but at more subdued rates of 11 percent as of the third quarter of 2022 and 8 percent as of the third quarter of 2023. By the third quarter of 2023, e-commerce sales accounted for 16 percent of all retail sales, up from 12 percent in the fourth quarter of 2019.

[Assistant] Forecast During the next 3 years, nonfarm payroll jobs are anticipated to grow at an average of 1.5 percent annually. Growth is anticipated to be slightly lower in year 1, with higher rates of growth expected in years 2 and 3. Strong gains in the leisure and hospitality sector in recent years are not expected to continue, and the sector is anticipated to resume a more historical growth trend after having recovered the jobs lost from the impacts of the COVID-19 pandemic. Growth in education and health services is likely to continue to be strong as the population continues to age, increasing the demand for health care.


[User] Population Trends From 2010 to 2016 population growth averaged 2.52 million, or 0.8 percent, a year. Net in-migration averaged 1.15 million people a year, accounting for 46 percent of population growth, while net natural change averaged 1.37 million people a year, or 54 percent of population growth (Census Bureau decennial census counts and population estimates as of July 1). Population growth slowed to an average annual rate of 0.6 percent, or 1.86 million people, from 2016 to 2020. During this period, net in-migration slowed to an average of people a year and accounted for 47 percent of the population gains, and net natural change declined to an average of people, or 53 percent of the growth. The COVID-19 pandemic led to a considerable slowdown in net natural change and net in-migration, which was affected by policies restricting immigration to the United States. From 2020 to 2021, the population increased at an average annual rate of 0.1 percent, or . Net in-migration declined to an average of annually, and net natural change decreased to an average of annually, largely because of the significant increase in COVID-19-related deaths. Since 2021, population growth has averaged 0.5 percent, or nearly 1.63 million people, a year, with net in-migration averaging 1.19 million and net natural change averaging . International Migration When examining the country of origin for immigration to the United States, the largest percentage of immigrants during 2022 came from India and Mexico, with each country accounting for 12 percent of total immigration, followed by China at 6 percent (Department of Homeland Security, Office of Immigration Statistics). Mexico accounted for 14 percent of immigration from 2010 to 2021. India accounted for 6 percent of all immigration from 2010 to 2020 but accounted for 12 percent in 2021. China accounted for 7 percent of immigration from 2010 to 2019 and 6 percent during 2020 and 2021. During 2022, approximately 7 percent of immigrants to the U.S. came from Europe, down from 8 percent in 2021 and 10 percent in 2020. Approximately 37 percent of all immigrants came from Asia during 2022, down slightly from 38 percent a year ago. Immigrants from South America accounted for 8 percent of all immigrants during 2022, down from 9 percent in 2021. Similarly, immigrants from Africa also accounted for 8 percent of immigrants, down from 9 percent in 2021. Immigrants from the Caribbean accounted for 9 percent of immigration in 2022, down from 10 percent a year ago. Age Cohort Trends The median age in the United States in 2022 was 39.0 years, up from 37.2 years in 2010. The youngest cohort, representing people under 20 years of age, has declined from 27 percent of the population in 2010 to 24 percent in 2022 (American Community Survey [ACS] 1-year data). The 40-to-64-year- old age cohort also declined during the same period from 33 percent to 31 percent, whereas the 20-to-39-year-old age cohort remained unchanged at 27 percent of the population. The only age cohort to increase was the 65 and older cohort; as the baby boom generation has aged, the 65 and older cohort has grown substantially. In 2010, this age group made up 13 percent of the total population, but by 2022 it had grown to 17 percent of the population. That increase helps explain the steady growth in healthcare- related jobs throughout the country because this age group tends to be a major consumer of health services. Population by Age Range in the Nation Note: Sum of percentages for each year may not add to 100 percent because of rounding. Source: 2010 and 2022 American Community Survey 1-year data Recent Regional Population Trends From 2022 to 2023, the population increased in 8 of the 10 HUD regions. Map 2 shows the population growth rates by region. The national population increased 0.5 percent during that period. The highest rate of growth among the HUD regions occurred in the Southeast/Caribbean and Southwest regions, each at 1.2 percent, followed by the Rocky Mountain region at 0.8 percent. The rate of population growth was 0.3 percent each in the New England, Great Plains, and Northwest regions. The population in the Mid-Atlantic region was up 0.2 percent, and the Great Lakes region grew 0.1 percent. In the Pacific region, the population remained relatively unchanged, whereas the population declined in the New York/New Jersey region by 0.2 percent. Map 2. Population Growth by HUD Region, 2022–23 Source: U.S. Census Bureau Population Estimates Program Household Trends The number of households in the United States is currently estimated at 130.54 million, representing an average annual increase of 0.8 percent, or households, since 2020. From 2010 to 2020, the number of households increased at the same pace of 0.8 percent, or 1.01 million households, a year. Since 2020, owner and renter households have each increased an average of 0.8 percent a year, compared with respective average annual rates of 0.5 and 1.4 percent from 2010 to 2020. Renting became more common in the years after the Great Recession, and the homeownership rate declined.

[Assistant] Households by Tenure and Homeownership Rate in the Nation Note: The current date is January 1, 2024. Sources: 2010 and 2020—2010 Census and 2020 Census; current—estimates by the analyst Forecast During the 3-year forecast period, the population is expected to increase at an average annual rate of 0.6 percent, or approximately 1.94 million people. Net natural change and net-in migration are expected to average and 1.19 million people a year, respectively. The population is expected to total 341.93 million by the end of the forecast period (Table 2). During the next 3 years, households are expected to increase by an average of 1.05 million, or 0.8 percent, annually. Population Quick Facts 2020 Current Forecast Population Average Annual Change Percentage Change 0.7 0.4 0.6 Household Quick Facts 2020 Current Forecast Households Average Annual Change Percentage Change 0.8 0.8 0.8 Notes: Average annual changes and percentage changes are based on averages from 2010 to to current, and current to forecast. The forecast period is the current date (January 1, 2024) to January 1, 2027. Sources: 2010 and 2020—2010 Census and 2020 Census; current and forecast—estimates by the analyst Table 2. Components of Population Change in the Nation, 2010 Through the Forecast Notes: Data are average annual totals. The forecast period is the current date (January 1, 2024) to January 1, 2027. Sources: U.S. Census Bureau; current and forecast—estimates by the analyst


[User] Current Conditions The national home sales market became slightly tight in 2023 as higher mortgage rates lowered the demand for sales housing and relieved some of the tightness that had been present in the market a year ago. The sales vacancy rate is estimated at 1.5 percent, on par with the vacancy rate in 2020. In the past year, the supply of existing homes for sale increased from 2.7 months in 2022 to 3.1 months in 2023 (NAR). The inventory of existing homes for sale also continued to increase from the recent low of reached in December 2021; since then, the inventory of homes for sale increased 14 percent to 1.00 million in December 2023. In 2023, new home sales were up 4 percent, and existing home sales declined 19 percent compared with 2022 (Census Bureau/HUD; NAR). During the same period, the median sales price for a new home decreased 7 percent, and the median sales price for an existing home increased 1 percent ( Seriously delinquent mortgages are those that are 90 or more days delinquent or in foreclosure. Source: CoreLogic, Inc. Aid, Relief, and Economic Security Act passed in March 2020, homeowners with federally backed mortgages were able to receive forbearance if the pandemic caused them to experience financial hardship. This concession prevented many mortgages held by this group of homeowners from moving into foreclosure or REO status. Current Regional Highlights The sales housing markets in the 10 HUD regions had mixed conditions during the fourth quarter of 2023, ranging from slightly tight to slightly soft. The New England region was slightly tight, the Great Lakes region was slightly soft, and the remaining HUD regions had balanced or mixed conditions. The state-level changes in the CoreLogic, Inc. home price index (HPI) for repeat sales show that the rapid price growth of the past few years has moderated in most states. From December 2022 to December 2023, the mode change for states was 7 percent for the HPI for repeat sales, with eight states recording this rate of price growth. Home price growth was led by states in the northeast, with Rhode Island, Connecticut, New Jersey, and New Hampshire all registering double-digit increases from There were no states with a decline in home prices, but prices were unchanged in Montana and Texas. Five states had price increases of only 1 percent (Louisiana, Hawaii, New York, Idaho, and Utah). 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: https://www.huduser.gov/portal/ushmc/ home.html#regional_map. Home Sales Trends: 2010 to Current In the early 2010s, home sales were still low from the effects of the national housing crisis during the previous decade before trending upward through 2021. During the next 2 years, home sales recovered rapidly, with existing home sales increasing an average of 9 percent annually and new home sales increasing an average of 18 percent annually. Mortgage rates increased in 2014, and existing home sales declined 3 percent before increasing an average of 4 percent a year from 2015 through 2017. National Home Sales Sources: National Association of REALTORS®; U.S. Census Bureau/HUD in 2019. In contrast, new home sales increased every year from 2014 through 2019 at an average rate of 8 percent. In 2020, new and existing home sales increased 20 and 6 percent, respectively. Existing home sales continued to increase in 2021 at a rate of 9 percent, whereas new home sales declined 6 percent that year. The increase in mortgage rates that began in 2022 had a marked effect on home sales. From 2022 through 2023, new and existing home sales dropped precipitously, declining by averages of 7 and 18 percent a year, respectively. In 2011, while the housing market was still soft from the Great Recession, the median sales price for new homes increased Price growth was relatively steady in the years that followed. From 2012 through 2020, the median sales price for new homes increased an average of 4 percent a year, and the median sales price for existing homes increased an average of 7 percent a year. As the housing market tightened in the wake of the COVID-19 pandemic, home price growth accelerated. From 2021 through 2022, the median price for new and existing home sales increased 17 and 14 percent a year, respectively. In 2023, the housing market eased, and year- over-year price growth decelerated to 1 percent for existing home sales, whereas the median price for new home sales declined 7 percent. From 2012 through 2019, the number of sales units permitted increased an average of 9 percent a year to approximately units. National Home Sales Prices Sources: National Association of REALTORS®; U.S. Share of Overall Sales in the Nation by Price Range During the 12 Months Ending 2023 Note: New and existing sales include single-family homes, townhomes, and condominium units. Source: Zonda As higher mortgage rates led to a decrease in home sales in 2022, the number of sales units permitted also declined. Sales construction declined 11 percent in 2022 and a further 8 percent in 2023 to units permitted. Housing Affordability: Sales The affordability of owning a home in the United States varies significantly depending on geography, but homeownership in general has become less affordable during the past 10 years. The HOI declined by 0.4 percentage point in the past year, reflecting a slowdown in the decline from the previous year when the HOI declined by 16.1 percentage points. 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-old age cohort, a prime group for first-time homebuyers. The homeownership rate for this age cohort declined from 53 percent in 2010 to 48 percent in 2020. Annual Sales Permitting Activity in the Nation Sources: U.S. NAHB/Wells Fargo Housing Opportunity Index for the Nation NAHB = National Association of Home Builders. 4Q = fourth quarter. Source: NAHB/Wells Fargo

[Assistant] Forecast During the forecast period, home sales demand is expected to be relatively strong. Demand is expected for 3.23 million sales units during the 3-year forecast period ( Data for 2020 are not available. Sources: American Community Survey 1-year data; Freddie Mac; Zonda be relatively constant through the next 3 years. The home sales market is highly sensitive to changes in mortgage rates, and further increases would lessen the demand for sales housing, whereas a decline would increase the demand for sales housing. Unforeseen changes in various other factors may also change future demand for sales housing. Rental housing and households doubling up are the most common substitutes for sales housing and the relative advantages of those options also has an influence on sales demand. The forecast period is January 1, 2024, to January 1, 2027. Source: Estimates by the analyst


[User] Current Conditions and Recent Trends The national rental market is soft, with an estimated vacancy rate of 8.9 percent—up from 7.5 percent in 2020 ( Includes apartments and units intended for rental occupancy. Sources: U.S. Gross Rent Affordability Index for the Nation Notes: 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. Data for 2020 are not available. Source: American Community Survey 1-year data During the 2016-through-2020 period, an estimated 21.6 percent of all renter households in the nation had moderate to high cost burdens, spending between 31 and 50 percent of their income on rent, whereas 22.0 percent were severely cost-burdened, spending more than 50 percent of income toward rent ( Consolidated Planning/CHAS Data, American Community Survey 5-year estimates Dollar changes are inflation-adjusted using the Consumer Price Index for All Urban Consumers (CPI-U). Source: HUD Picture of Subsidized Households Table 7. National Picture of Subsidized Households, 2023 Forecast During the 3-year forecast period, the net demand for new rental units is estimated at nationwide as the market works to absorb excess vacancies (Table 8). This level of demand is much lower than the pace of rental construction during the past several years. The rental units already under construction will satisfy all of the estimated demand during 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. A continued rise in mortgage interest rates would likely result in increased rental demand, whereas a drop in mortgage rates would incentivize a portion of renters to become homeowners. Future rental demand also relies on rent costs. If soft market conditions persist and rents decline, this would likely create new renter households as they decouple from a doubled up household.

[Assistant] StatusRental Units Demand Units Under Construction Units Note: The forecast period is January 1, 2024, to January 1, 2027. Source: Estimates by the analyst Table 8. Demand for New Rental Units in the Nation During the Forecast Period