Modest Growth and a Tight Home Sales Market in the Wichita HMA
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 Wichita Housing Market Area (HMA) includes the counties of Butler, Harvey, Kingman, Sedgwick, and Sumner in south central Kansas. Wichita is the most populous city in Kansas, with an estimated population of 650,900 people. The HMA is home to many aerospace manufacturers and businesses in the aerospace industry as well as the McConnell Air Force Base. A recent Comprehensive Housing Market Analysis highlighted the economic and housing market activity in the area.
Over the past year, nonfarm payrolls have declined significantly due to countermeasures to slow the spread of the COVID-19 virus. A dramatic decline in demand for air travel during this period of the pandemic affected the area’s many businesses in the aerospace manufacturing industry.
Due to the pandemic and pandemic response, over the past year the unemployment rate in the HMA surged to 17.7 percent, compared to 3.3 percent a year prior. Unemployment rose precipitously across the nation during the pandemic, particularly at the onset of the pandemic in spring 2020. As the year progressed, the unemployment rate decreased, but still remains historically high. Over the past year job losses occurred across most sectors in the Wichita HMA, but the leisure and hospitality sector experienced especially high losses, declining by 8.2 percent for a loss of 2,700 jobs.
The manufacturing sector is the largest employment sector in the area, making up 18 percent of all jobs in the area. By comparison, manufacturing makes up 9 percent of employment nationally. The largest employers in the manufacturing sector are Spirit AeroSystems Holdings, Inc. and Textron Aviation Inc., which employ 13,500 and 9,500 people respectively.
Other large employment sectors include the government and education and health services sectors. The McConnell Air Force Base employs 6,550 people. (Military and civilian employees are typically excluded from nonfarm payroll survey data.)
Over the next 3 years, nonfarm payrolls are expected to grow by an average of 1 percent annually with stronger growth anticipated during the second and third year.
Housing Market Activity
The Wichita HMA home sales market is slightly tight with an estimated vacancy rate of 1.7 percent. The report partly attributes the tight sales market conditions to a decrease in unsold home inventory available for sale. In August 2020, the unsold inventory averaged 1,600 homes, which is a 26 percent decrease from a year prior. The decline in inventory reflects the high number of homes for sale being taken off the market during the pandemic. Over the past year, 14,200 new and existing homes were sold, which is a 1 percent increase from the previous year. New home sales increased by 6 percent to 830 new homes sold over the past year.
Over the next 3 years, demand is estimated for 3,025 new homes and 1,125 new rental units in the Wichita HMA. For more detailed information, please see the full Comprehensive Housing Market Analysis on the Wichita HMA.