Growth in Employment and Rental Housing Demand in the Fort Wayne HMA
HUD’s Comprehensive Housing Market Analyses provide information on changes in local economies, housing markets, and populations and provide 3-year forecasts for demand in the area. This article is part of a series that sheds light on the content of these analyses.
The Fort Wayne Housing Market Area (Fort Wayne HMA) in northeastern Indiana includes Allen, Wells, and Whitley counties and is centered around the city of Fort Wayne, Indiana’s second-largest city after Indianapolis, the state capital. The Fort Wayne HMA has a population of approximately 434,900, more than 60 percent of whom live in the city of Fort Wayne. A recent Comprehensive Housing Market Analysis highlighted economic and housing market activity in the Fort Wayne HMA.
Employment Growth Since 2010 and a Declining Unemployment Rate
The Fort Wayne HMA’s economy has been growing since 2010, and in 2016, nonfarm payrolls were 221,700, exceeding the previous record high of 218,000 in 2007. Through 2016, nonfarm payrolls have increased by 1.4 percent annually, with growth occurring in all but two employment sectors. Expansions in health care and auto manufacturing have led job growth over the past year. The area’s unemployment rate declined over the past year from 4.3 percent to 3.5 percent, which is about average for the state of Indiana and less than the national average of 4.1 percent.
Employment Growth in Healthcare and Stability in Manufacturing
Manufacturing is a large part of the local economy; 4 of the 10 major employers in the area are in the manufacturing sector. Although the manufacturing sector is a fraction of its past size, employment in the sector has stabilized since 2010 and currently makes up roughly 16 percent of the local economy, trailing only the education and health services sector at 19.2 percent. The largest manufacturer in the HMA is General Motors, which employs more than 3,600 people who produce the GMC Sierra and Chevrolet Silverado pickup trucks.
The education and health services sector is the largest sector in the area. The HMA’s two largest employers, Parkview Health and Lutheran Health Network, are healthcare companies employing 6,680 and 4,820 people, respectively. Parkview Health is undergoing a $55 million renovation of Parkview Hospital Randallia, which will create 150 jobs when completed by the end of 2019.
Employment growth is expected to continue over the next 3 years at a rate of 1.5 percent annually. Growth will be led by multiple expansions and developments in the Fort Wayne HMA, including expansions in the manufacturing and retail sectors as well as revitalization projects in the city of Fort Wayne.
A Tight Sales Market Along With a High Homeownership Rate
The sales market in the HMA is slightly tight, with a vacancy rate of 1.3 percent. Existing home sales declined 3 percent over the past year and are 4 percent below their prerecession peak in 2006. Economic growth and a decline in the supply of houses since 2010 have improved the new home sales market, which increased by 5 percent over the past year. Since 2010, new home sales prices have increased by 7 percent annually. Single-family home construction has decreased 2 percent over the past year, and the report cites a shortage of skilled workers as a major obstacle in single-family home construction.
The homeownership rate in the Fort Wayne HMA is currently estimated at 69 percent, which is down from 71.1 percent in 2010. The report indicates that restrictive lending standards for prospective homebuyers and increased demand for rental units within the city of Fort Wayne have contributed to the lower homeownership rate. Nevertheless, the homeownership rate in the HMA is higher than homeownership rates statewide and in the nation as a whole.
Over the next 3 years, demand is estimated for 3,475 new homes in the Fort Wayne HMA. The 430 homes currently under construction will help meet some of this demand.
Growing Demand for Rental Units Within the City of Fort Wayne
The rental market in the Fort Wayne HMA is slightly soft, with a vacancy rate of 7.2 percent. Economic growth and net inmigration have contributed to the declining vacancy rate. The apartment market is balanced, with a vacancy rate of 4.4 percent. Since 2012, demand for apartments has been strong in the city of Fort Wayne, and builders have responded by increasing multifamily building construction, which is at its highest level since 2005.
Over the next 3 years, demand is estimated for 1,950 new market-rate rental units. The 530 units currently under construction will help meet some of this demand.