The Milwaukee HMA Experiences Employment Growth, but the Housing Market is Soft
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 Milwaukee-Waukesha-West Allis, Wisconsin Housing Market Area (Milwaukee HMA) is located just west of Lake Michigan, approximately 90 miles north of Chicago. The Milwaukee HMA comprises Milwaukee, Waukesha, Ozaukee, and Washington counties and is coterminous with the Milwaukee-Waukesha-West Allis Metropolitan Statistical Area. The Milwaukee HMA is the state’s largest HMA; with an estimated population of 1.58 million, it accounts for roughly one-fourth of the state’s total population. A recent Comprehensive Housing Market Analysis highlighted the economic and housing market activity in the Milwaukee HMA.
Low Unemployment Rate, Employment Growth Led by Education and Health Services Sector
Over the past year, nonfarm payrolls have increased by 0.8 percent, or 6,600 jobs. The report attributes some of this increase to the manufacturing sector, which grew by 2.3 percent, or 2,700 jobs, over the past year.
The largest employment sector in the Milwaukee HMA is the education and health services sector, which accounts for 20 percent of area employment, followed by the professional and business services sector and the manufacturing sector at 15 percent and 14 percent of area employment, respectively. The education and health services sector grew 1.8 percent over the past year, adding 3,000 jobs and leading all other sectors in employment growth. The professional and business services sector also had strong growth, adding 1,700 jobs for 1.3 percent growth over the previous year. The manufacturing sector added 2,700 jobs for an increase of 2.3 percent over the previous year.
The unemployment rate averaged 3.2 percent over the past year, which matches the area’s record-low unemployment rate from 1999 and is below the current national unemployment rate of 3.6 percent.
Over the next 3 years, nonfarm payrolls are expected to increase by 0.5 percent annually.
A Low Homeownership Rate and Large Housing Stock Contribute to Soft Sales
The sales housing market is slightly soft, with an estimated vacancy rate of 1.8 percent. Over the past year, 26,150 homes were sold in the Milwaukee HMA, nearly the same number as in the previous year, and less than 5 percent of total home sales were new home sales. Only in 2017 did home sales prices surpass their 2007 prerecession prices. The sizable housing stock has also impacted new home sales, since existing homes are competitively priced.
The housing stock is considerably older in the Milwaukee than the nation. 55 percent of homes in the HMA were built before 1970 and 20 percent were built before 1940, whereas the national average for homes built before 1970 was 35 percent and 10 percent for homes built before 1940.
The current homeownership rate in the area is 58.9 percent. The homeownership rate has been declining since 2010, and with all household growth occuring in rental households, the homeownership rate is projected to continue to decline over the next 3 years.
The rental housing market is soft, with an estimated vacancy rate of 9.6 percent, and the apartment market is balanced.
Demand is estimated for 4,100 new sales units over the next 3 years. No demand is expected for additional rental units. For more detailed information, see the recent Comprehensive Housing Market Analysis on the Milwaukee HMA.