Pittsburgh: Affordable Housing, a Growing Economy, and Robust Employment Characteristics
Pittsburgh's property market is underpinned by strong fundamentals: a thriving economy, strong employment sectors, and affordable housing for renters and buyers. Pittsburgh hosts ten Fortune 500 companies, along with strong healthcare and education sectors, with the University of Pittsburgh Medical Center being the area's largest employer.
AFFORDABLE COSTS OF LIVING: Pittsburgh has recently been named the most affordable city in the world by the Urban Reform Institute. Home prices and rents remain below income-to-housing cost ratios within other markets. Affordable housing inventory within the United States is increasingly uncommon, with most cities having extremely limited affordable housing stock as a portion of the total housing inventory.
ROBUST EMPLOYMENT SECTORS: Pittsburgh's diverse economy includes strong sectors such as healthcare, education, technology, and manufacturing. Ten companies headquartered in the Pittsburgh region made the Fortune 500 list in 2023, with PNC Financial Services and WESCO International sitting toward the top of the list.
GROWING TECHNOLOGY SECTOR: While traditionally known for its steel sector, Pittsburgh has a growing technology sector. Pittsburgh recently ranked 13th in the world for startup ecosystems and attracted more than $1.02 Billion in venture capital in 2022 alone, more than a 21% increase from 2021. Pittsburgh is also home to Carnegie Mellon's School of Computer Science, which is consistently ranked as one of the top computer science programs in the world - along with Carnegie Mellon's AI program, which just ranked 1st by US News and Review.
STRONG WAGE AND POPULATION GROWTH: Pittsburgh's population and wage metrics are growing, which suggests an upward trajectory for future rental and housing values. The city has seen ongoing employment growth within its robust healthcare and education sectors - which showcase high, resilient wages.
GROWTH IN RENTS AND HOME VALUES: Over the past several years, Pittsburgh has experienced a rise in home values and rents. As of mid-2023, median rents have grown more than 34% since 2016, and home values have increased more than 56% within the same period, reflecting the city's economic growth and rising housing demand.
REDUCED EXISTING HOUSING INVENTORY: Like many other cities, Pittsburgh faces challenges of available housing inventory for prospective homeowners. The number of new listings is currently lower than in 2022 - pointing to an increasingly strained housing market with many homeowners holding onto their properties due to their locked-in low-interest rates, which makes them hesitant to sell in a housing market with limited new production.
Pittsburgh's housing and rental markets continue to boast strong fundamentals that point toward long-term sustained growth, backed by limited housing supply, robust employment, and affordable housing costs compared to other markets. We anticipate that the current affordability, in tandem with promising demographics, will continue to place upward pressure on property values in the coming years.
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