Modest Growth and a Balanced Housing Market in the Pittsburgh HMA
This analysis was completed before the COVID-19 outbreak in the United States and does not account for the economic and housing market impacts of the actions taken to limit the spread of the virus. Currently, the duration and depth of the economic disruption are unclear, as are the extent and effectiveness of government policies to counteract this disruption. HUD will continue to monitor market conditions in the area and will update this report as needed.
HUD’s Comprehensive Housing Market Analyses provide information on changes in local economies, housing markets, and populations and provide three-year forecasts for demand in the area. This article is part of a series that sheds light on the content of these analyses.
The Pittsburgh Housing Market Area (HMA) includes the seven counties of Alleghany, Armstrong, Butler, Beaver, Fayette, Washington, and Westmoreland in southwest Pennsylvania. The Pittsburgh HMA is coterminous with the Pittsburgh, Pennsylvania Metropolitan Statistical Area and has an estimated population of 2.3 million. Pittsburgh was long known as the “Steel City” for its robust steel manufacturing in the 19th and 20th centuries. Pittsburgh sits at the confluence of the Allegheny, Monongahela, and Ohio rivers and is sometimes referred to as the “City of Bridges” because of the 446 bridges in the area. A recent Comprehensive Housing Market Analysis highlighted economic and housing market activities in the Pittsburgh HMA.
Modest Growth Led by Construction
In 2019, payrolls in the Pittsburgh HMA increased by 0.4 percent reflecting an addition of 4,600 jobs. The largest employment gains by percentage and in overall number were in the mining, logging, and construction sector, which increased by 3.4 percent, an addition of 2,400 jobs. Other sectors that have experienced notable growth include the leisure and hospitality sector, which increased by 1.7 percent, an addition of 2,100 jobs, and the professional and business services sector, which increased by 1.2 percent, an addition of 2,200 jobs.
Employment growth varied across sectors in the Pittsburgh HMA, as some sectors experienced declines. The largest decline was in the manufacturing sector, which decreased by 2.7 percent, a loss of 2,300 jobs. Other sectors that experienced employment declines included the wholesale and retail trade sector, which declined by 1.1 percent, a loss of 1,800 jobs, and the government sector, which declined by 0.1 percent, a loss of 100 jobs.
The largest employment sector in the Pittsburgh HMA is the health and education services sector, which accounts for 22 percent of nonfarm payrolls in the area. The sector includes the 2 largest employers in the HMA — UPMC Health System and Highmark Inc. — and 4 of the 10 largest employers in the region. The sector experienced modest growth in 2019, adding 100 jobs.
Over the next three years, nonfarm payrolls are expected to increase by an annual average of 0.3 percent. Employment growth during this period is expected to be led by increases in the health and education services sector, leisure and hospitality sector, and wholesale and retail trade sector.
Housing Market Activity
In 2019, the Pittsburgh HMA homeownership rate was estimated at 68.9 percent, which is higher than the national homeownership rate of 65.1 percent during the period. The Pittsburgh HMA sales market is balanced with an estimated vacancy rate of 1.4 percent. Total home sales in 2019 were 36,700, a 5 percent decrease over the previous year. New home sales accounted for 5 percent of total home sales. In 2019, the average home sales price increased by 3 percent to $191,500. Over the next 3 years, demand is expected for 9,000 new homes in the HMA.
In 2019, the rental market was also balanced with an estimated vacancy rate of 7.5 percent. Roughly 39 percent of renters rented single-family homes, 20 percent were in buildings with two to four units, and 39 percent were in buildings with five or more units. The apartment market is slightly tight with an estimated vacancy rate of 3.2 percent. Over the next three years, demand is expected for 6,025 new rental units.
For more detailed information, including a breakdown of the Allegheny and suburban submarkets, see the recent Comprehensive Housing Market Analysis on the Pittsburgh HMA.