Baltimore's Economic Indicators Report

Welcome to Baltimore! The City is regarded as the historic, commercial, educational, and cultural center of Maryland and is located along the Interstate 95 corridor, between Washington, D.C. and Philadelphia. It is the most populous city in Maryland and the 30th most populous city in the United States.

This dashboard is maintained by the City of  Baltimore's Bureau of the Budget and Management Research . Our office compiles economic data relating to key indicators that provide insights for businesses, policymakers, and residents alike. While the data refreshes daily, the narrative content has been updated to reflect context as of the end of the second quarter of 2024 (April to June).

This report focuses on key indicators, including topics such as:

•  Labor Market : tracking unemployment rates, labor force participation, and weekly wage trends in Baltimore City.
•  Real Estate Market : insights into residential sales (by volume and prices) and an overview of commercial vacancy rates (by type of space).
•  Demand Based Indicators : analyzing economic activity by examining sales tax receipts in Baltimore City and tracking hotel room demand, prices, and occupancy rates.
•  Interest Rates : analyzing factors that influence borrowing and investment within the wider economy.
•  Gross Domestic Product  (GDP): an overview of the City's economic output in relation to the wider Baltimore Metro Area and State.

In April 2023, the City experienced the lowest unemployment rate since the U.S. Bureau of Labor Statistics began tracking this indicator in 1990. In recent months, unemployment levels have been increasing, up to 4.3% in the City as of June 2024. This is a substantial jump compared to June 2023 figures of 2.7%. This impact is compounded by an increasing labor force. There were 7,510 individuals actively seeking work in June 2023 compared to 11,882 actively seeking employment in June 2024.

The State experienced similar increases with the unemployment rate at the State level. As of June 2024, the State's unemployment rate was 3.2%, an increase of 1.2% compared to the same period of the prior year.

Since February 2023, the City's average unemployment rate has been on par with the national unemployment rate if not lower than, which historically has not been the case.

As of June 2024, resident employment experienced a 0.4% year-over-year decrease while the labor force increased 1.2% during the same period. These figures reflect the delay in the job market's ability to absorb the increased supply of labor in the City.

Average weekly wages in the City grew to $1,667 according to the quarterly report from the Bureau of Labor Statistics for January 2024. This is an increase of $57, or 3.5%, compared to the same period of the prior year. Over this period, inflation grew at 3.1% which indicates that workers gained purchasing power from wages in real terms.

In terms of jobs by industry, Government along with Education and Health Services-related industries continue to be strongholds in the City's economy, with employment averaging 76,407 and 43,716 respectively in 2024. The City is home to multiple higher education institutions, such as John Hopkins University, University of Maryland Baltimore, Morgan State University, Coppin State University, and Maryland Institute College of Arts among others. Two of these entities, Johns Hopkins and University of Maryland, also extend into the healthcare sector, operating their respective medical systems that serve the greater Baltimore region alongside Mercy Medical System and LifeBridge Health. Having this prominent health care and knowledge-related industry presence provides Baltimore with a strong economic backbone.

The housing market experienced record highs in 2022 (which benefited the City's Recordation and Transfer tax revenues), yet activity in the market stabilized in recent years. Average home sold prices in the City increased by 5.5%, comparing June 2024 to June 2023. During the same period, the Metro Area (less the City) saw an increase of 3.4% for the average sold price of residential real estate. The gap is narrowing slightly as City home prices were 53.8% of the Metro Area's average sold price in June 2023, whereas City home prices grew to 54.8% of the Metro Area home prices.

In the second quarter of 2024, there were 2,186 residential property transactions recorded according to summary data provided by LiveBaltimore sourced from Bright MLS. Some of the neighborhoods with the strongest activity included: Canton, Belair Edison, and Riverside. The map below shows housing market activity by units sold in each neighborhood during the second quarter.

The housing market is impacted by seasonality, benefiting from an increase in demand during the summer months. The housing market has been stabilizing in recent years after reaching record highs in Fiscal 2022. Year over year, residential units sold in the City decreased by 22.5% comparing June 2024 to June 2023.

Within Baltimore, commercial real estate properties highlight a mixed economic landscape as seen through their vacancy rates. Office spaces in the downtown business district still face pressures from the impact of remote work on demand, though return-to-office policies have mitigated this slightly. Demand for retail spaces has shifted in recent years due to changes in consumer behaviors driven by online shopping. Conversely, industrial spaces have remained resilient, indicative of the sustained demand for warehousing and distribution spaces due in part to the e-commerce boom. Looking ahead, commercial entities will need to continue adapting to the current landscape.

Based on CoStar's latest data, the vacancy rate for office spaces is 17.9%, which is 0.4% lower than the same period of the prior year. However, the inventory (in terms of square feet) has dropped by 92.4K compared to the last quarter of 2022. This occupancy rate indicates that there are still leasing contracts in place for office space despite assumed continuation of remote working environments.

Sales Tax revenue is collected by and for the sole benefit of the State. Although Baltimore City does not collect or benefit from this revenue – with the exception of a small percentage that constitutes the City’s Highway User Revenue, sales tax information can serve as an indicator of the overall economic environment. The State releases reports on sales activity defined by nine categories: Food & Beverage, Apparel, General Merchandise, Automotive, Furniture & Appliances, Building and Industrial Supplies, Utilities & Transportation, Hardware, Machinery & Equipment, and Miscellaneous. The State halted the production of monthly reports in 2023, and the information below summarizes annual activity as a result.

In Fiscal 2023, Sales Tax revenue generated in the City declined by 1.3% while the State (less City) decreased by 3.3% compared to Fiscal 2022. Despite the overall decline, the City saw some growth, the largest increase related to the Utilities & Transportation category, which was up by 12.3% or $8.3 million compared to the prior year.

The portion of State sales tax collected in the City represented 6.1% in 2023.

The hotel and tourism-related industries have generally rebounded in the aftermath of the COVID-19 pandemic. The summer months of last year saw the highest ADR rates since the pandemic began, and it is anticipated that this trend will continue into this upcoming summer.

Year over year, room rates in the City have increased 4.6%, from an average of $178.8 during the second quarter of 2023 to $187.1 during the second quarter of 2024. The increase in average daily room rates is the result of not only an increase in demand, nearing levels experience before the pandemic, but also a reflection of the impact of inflation in the economy.

Occupancy rates for hotel rooms in the City have been steadily increasing over the past few years. However, the inventory of hotel rooms available has fallen since the onset of the pandemic and thereafter. Year over year, total rooms available dropped from 9,330 in June 2023 to 9,039 in June 2024. This represents a net loss of 291 rooms available or a reduction of 3.1% in the overall number of hotel rooms.

Following the COVID-19 pandemic, the United States was experiencing an inflationary period unseen for nearly fifty years. As part of the mitigation process, the Federal Reserve has taken steps to raise the federal funds rate, which in turn has raised borrowing costs for both businesses and individuals. These increased costs of borrowing are worth a deeper dive to get an insight into potential spending and saving in the public sphere as with lower rates, spending and investments are encouraged; while higher rates tend to curb borrowing, impacting overall economic activity.

The following dashboard shows the current and historic borrowing rates as reported by the Federal Reserve. The three rates highlighted are:

• Bank Prime Loan Rate - the rate from the majority of top 25 insured U.S.-chartered commercial banks. The prime rate is one of several base rates used by banks to price short-term business loans.
• 30-Year Fixed Rate Mortgage Average - the mortgage rate is based on applications submitted to Freddie Mac from lenders across the country. This rate is an indicator of both the current borrowing costs of homeownership, as well as expected long-term returns by financial institutions.
• Finance Rate on Personal Loans at Commercial Banks for a 24-Month Loan - the finance rate is based on interest charges on personal balances at all reporting banks. This rate is usually close to the mean of long-term auto loan rates and short-term credit card APR and can be used as a proxy for the current average borrowing costs for individuals making non-real estate purchases using credit.

The 30-Year Fixed Mortgage Rate influences activity within the housing market, impacting affordability and demand. Lower mortgage rates boost housing market activity, as the City experienced in Fiscal 2022 which led to record high levels of Recordation and Transfer Tax revenues. In the last year, this rate has increased leading to a slowdown in the housing market.

This section provides brief information about the City.

While the population in the Baltimore Metro area has experienced growth since 2000, Baltimore City’s population has been declining at a rate of approximately 1% each year. In December 2023, the U.S. Census reported that there were 569,931 residents in the City as of July 2022.

The median household income within the City has grown to $54,068 in 2021 according to the latest U.S. Census release. This is an increase of 5.0%, or $2,583, compared to prior reported year (2020).

Gross Domestic Product (GDP) is widely used as the general measure of current economic output and growth. It consists of the dollar values of personal consumption, business investment, government spending, and net exports. The following dashboard displays most recent Baltimore and Maryland GDP figures, a historical overview, and a comparison of GDP values of similarly sized metros. 

 The following charts help illustrate the growth Baltimore has experienced since 2017. It also gives context of how both the economic output and growth in Baltimore compare with the Maryland GDP and provides a visual of how Baltimore has contributed to the state's economy. 

• Date content was last updated: 9/5/2024.
• Data sources and last refresh are indicated on each dashboard.

These economic indicators impact the City's revenue sources. The following table summarizes the preliminary yearend projection for the major local tax revenues in Fiscal 2024:

• Unemployment Rate – The unemployment rate is calculated by taking the total number of unemployed workers (who are willing and able to work) divided by the total number of people in the labor force. The unemployment rate is affected by both changes in employment as well as people entering or leaving the labor force.
• Resident Employment – Represents total employment by specifically City residents.
• Total Employment – Total employment represents the total number of jobs that are available and have been filled by both City residents and workers who live outside of the City.
• Labor Force – The labor force is the sum of all employed and unemployed people. The labor force includes anyone over the age of 16 that is either employed or actively looking for a job.

• Total Units Sold – Total number of housing sales that have been completed for the selected time period.
• Average Home (Sales) Price – Calculated by taking the total Sold Dollar Volume (sum of all sales) divided by the number of units sold.
• Average Days on Market – Days on market is defined as the total number of days the listing is on the active market before either an offer is accepted or the agreement between real estate broker and seller ends. Average days on market represents the average for all of the units in the selected region.
• Commercial Vacancy Rates – A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space is generally not included in vacancy calculations.
• Market Rent/Sq. Ft – The amount paid for rent for a property divided by the total square footage of the property.

• Hotel Occupancy Rate – Total number of rooms sold divided by the number of rooms available, multiplied by 100. Occupancy is always expressed as a percentage of rooms occupied.
• Average Daily Room Rate – The Average Daily Room Rate is calculated by taking the total room revenue divided by the number of rooms sold, displayed as the average rental rate for a single room.
• Hotel Room Inventory – The total number of rooms that exist across all hotels in the area.

• Bank Prime Loan Rate - the rate from the majority of top 25 insured U.S.-chartered commercial banks. The prime rate is one of several base rates used by banks to price short-term business loans.
• 30-Year Fixed Rate Mortgage Average - the mortgage rate is based on applications submitted to Freddie Mac from lenders across the country. This rate is an indicator of both the current borrowing costs of homeownership, as well as expected long-term returns by financial institutions.
• Finance Rate on Personal Loans at Commercial Banks for a 24-Month Loan - the finance rate is based on interest charges on personal balances at all reporting banks. This rate is usually close to the mean of long-term auto loan rates and short-term credit card APR and can be used as a proxy for the current average borrowing costs for individuals making non-real estate purchases using credit.
• Consumer Price Index – The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living; the CPI is one of the most frequently used statistics for identifying periods of inflation or deflation. (Source: Investopedia)
• Gross Domestic Product – Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. Though GDP is usually calculated on an annual basis, the United States releases an annualized GDP estimate for each quarter in addition to the annual calculation. GDP includes all private and public consumption, government outlays, investments, private inventories, paid-in construction costs and the foreign balance of trade (exports are added, imports are subtracted). Put simply, GDP is a broad measurement of a nation’s overall economic activity. (Source: Investopedia)
• Consumer Confidence – An index developed by the Conference Board that measures how optimistic or pessimistic consumers are with respect to the economy in the near future. The idea behind the Consumer Confidence Index (CCI) is that if consumers are optimistic, they tend to purchase more goods and services. This increase in spending inevitably stimulates the whole economy. (Source: Investopedia)
• Federal Funds Rate - The federal funds rate is the interest rate that depository institutions, or banks, lend money to one another. The funds come from excess balances the bank owns which are held at the Federal Reserve and are used to meet Reserve requirements. Another term for the federal funds rate is the overnight rate. The Federal Open Market Committee (FMOC) meets eight times a year to set the federal funds rate. Led by Jerome Powell, the FMOC makes periodic adjustments to the rates based on open market operations and the supply of money required to meet target rates. (Source: Investopedia)