An Introduction to HUD’s Regions
To capture regional differences in demographic trends, employment opportunity, and economic growth that directly affect real estate values, HUD economists produce Regional Narratives each quarter for 10 defined regions within the United States.
Most economic indicators used to determine the state of U.S. economy, including the gross domestic product (GDP), the unemployment rate, Consumer Price Index, and many other economic statistics — are national in scope. Economic analysis at the national level, however, ignores regional differences in such areas as demographic trends, employment opportunity, and economic growth that directly affect real estate values and vary widely. To close this information gap, field economists from HUD’s Office of Policy Development and Research (PD&R) analyze housing market and other economic trends in the 10 regions of the country that HUD established to provide regional expertise and support for the department’s various program offices. Field economists develop a wealth of regional housing economic data which will be featured in this section of the Edge.
Each quarter, HUD economists produce Regional Narratives to analyze sales and rental trends in these regions’ housing markets. PD&R makes these data available through the U.S. Housing Market Conditions website. This portal contains a range of data and analysis on national, regional, state, county, and metropolitan housing and economic conditions.
The following overview of the economic and demographic conditions of the 10 HUD regions is designed to help inform stakeholders and allow a wider interpretation of the housing data as well as future analyses on the U.S. Housing Market Conditions website.
Rich with political and economic history, the New England region (Region 1) consists of Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine. Although the states in this region originally grew their economies through manufacturing and shipping, aided by their supply of natural resources, in recent decades the New England region has moved toward an economy focused on finance, insurance, and real estate; educational and health services; and technology. According to the U.S. Bureau of Labor Statistics, most the jobs in this region are in retail, education and health services, professional and business services, and government. Even though the New England region accounts for only about 4 percent of the country’s population, its GDP, according to 2014 data from the Bureau of Economic Analysis, is roughly 5.4 percent of the country’s total GDP.
New York/New Jersey
Although the New York/New Jersey region (Region 2) consists of only two states, its population is very large — approximately 9 percent of the country’s total population — and it plays an outsized role in the shape and trends of the U.S. economy. Finance, hospitality, education and health services, and government are the region’s dominant economic sectors, and its GDP is 11.3 percent of the total U.S. GDP.
Consisting of Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia, the Mid-Atlantic region (Region 3) makes up about 9.5 percent of the country’s population and 10 percent of the U.S. GDP. Unsurprisingly, this region, centered around Washington, DC, has a large number of jobs in the government, professional services, and education sectors. These industries, in addition to retail services, health services, and hospitality, are significant drivers of economic activity in the region.
With about 21 percent of the U.S. population, the Southeast/Caribbean region (Region 4) has the largest population of the 10 regions. This region consists of Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee as well as the territories of Puerto Rico and the U.S. Virgin Islands. Excluding Puerto Rico and the U.S. Virgin Islands, this region represents 16 percent of the U.S. GDP. Among the region’s leading jobs-producing industries are wholesale and retail trade, professional and business services, educational and health services, and leisure and hospitality.
Consisting of Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin, the Midwest region (Region 5) makes up 16 percent of the U.S. population and 15.6 percent of the U.S. GDP. This region has traditionally been known for its large manufacturing industry, which, although declining in recent decades, still generates many of the region’s jobs. The manufacturing, retail, professional services, education, and government sectors produce nearly an equal proportion of jobs for these states.
The Southwest region (Region 6), consisting of Arkansas, Louisiana, New Mexico, Oklahoma, and Texas, makes up 13 percent of the U.S. population and contributes 13 percent of the total U.S. GDP. This region has a large number of jobs in goods-producing sectors, triggered in recent years by an oil boom in Texas and Oklahoma. This boom in oil-based jobs has helped drive unemployment rates down to nearly 4 percent, below the national unemployment rate. Although the oil boom has spurred the expansion of the health services, retail, and leisure industries, recent declines in oil prices could slow the region’s growth.
Iowa, Kansas, Missouri, and Nebraska make up the Great Plains region (Region 7), which represents 4 percent of the U.S. population and 4 percent of the country’s GDP. Long considered the nation’s “breadbasket,” this region is driven in part by agricultural and related industries. In addition, the education and health services industries are a large source of jobs for the region.
The Rocky Mountain region (Region 8) contains just under 4 percent of the U.S. population and contributes 3.6 percent of the total U.S. GDP. The region is made up of Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming, which in recent years have seen growth in mining and oil production as well as in the construction, health services, and tourism industries. As with the Southwest region, which has benefited from an oil boom in recent years, states in the Rocky Mountain region — particularly North and South Dakota — have seen an increase in jobs in oil-related industries, leading to low unemployment. Although the oil boom has benefited the region, lower oil prices could slow its growth.
Arizona, California, Hawaii, and Nevada make up the Pacific region (Region 9). This region has slightly more than 15 percent of the U.S. population and generates approximately 16 percent of the country’s GDP. Many of the regions’ jobs are in the leisure and hospitality sectors, education and health services, professional and business services, finance, and even manufacturing. These states, especially California and Nevada, were hit hard during the housing market downturn after 2005. Although the housing market has made a comeback in recent years, other economic issues stemming from the housing crash and subsequent recession remain.
Alaska, Idaho, Oregon, and Washington make up the Northwest region (Region 10), which has 4 percent of the U.S. population and contributes a proportional 4 percent to the country’s GDP. As with the country as a whole, this region has a large number of jobs in professional and business services, education and health services, and wholesale and retail trade. However, the region also has relatively strong mining, logging, construction, and manufacturing industries.
This summary of HUD’s 10 regions offers stakeholders and other interested parties a better understanding of PD&R’s various reports on national and regional housing markets. This information, however, is constantly changing. By visiting the U.S. Housing Market Conditions website, readers can stay up to date on the current housing, demographics, and economic trends in these regional markets.