Lancaster, PA
Pennsylvania's quiet outperformer. Lancaster is a single-county metro of 553,202 residents where the FHFA HPI climbed 60.2% over five years — outpacing both the state and national averages — on a $279,400 median home value. Unemployment sits at 2.7%, permits run 2.76 per 1,000, and net IRS migration is essentially flat at -192.
The numbers that matter most
What an investor checks first when sizing up a new metro — affordability ratio, rent vs income, cap rate proxy, and where the market is moving. Each metric shown vs. state and national medians for instant context.
moderate
Price to income
3.34×
The single most-cited 'is this market still cheap' check. Below 3× and you're in an affordability tailwind.
- vs Pennsylvania
- 3.03×
- vs U.S.
- 3.43×-0.09
Benchmark
ACS median home value ÷ median HHI
comfortable
Rent to income
21.9%
What share of a typical household's income goes to rent. Below 30% means tenants can absorb modest rent increases.
- vs Pennsylvania
- 22.4%-0.5
- vs U.S.
- 23.3%-1.4
Benchmark
(HUD FMR 2BR × 12) ÷ median HHI
deal-by-deal
Cap rate proxy
4.3%
Rough first-pass yield assuming a 35% expense ratio. Not an underwriting number — a 'is this even worth modeling' filter.
- vs Pennsylvania
- 4.9%
- vs U.S.
- 4.3%
Benchmark
(FMR 2BR × 12 × 0.65) ÷ ACS median home value
shrinking
Net migration
-0.03%
Forward-looking demand signal. Positive net migration drives rent growth and absorbs new supply.
- vs Pennsylvania
- 0.09%
- vs U.S.
- 0.03%
Benchmark
IRS net migration ÷ population
pipeline growing
Permit pipeline
2.76
permits per 1,000 residents
Forward-supply indicator. Above ~5 means the metro is building meaningfully relative to its size; below 2 means supply is tight.
- vs Pennsylvania
- 2.17+0.59
- vs U.S.
- 3.52
Benchmark
Census BPS permits TTM ÷ population × 1,000
very tight labor market
Unemployment
2.7%
Tighter unemployment means higher wages, more rental demand, lower vacancy.
- vs Pennsylvania
- 3.6%-0.9
- vs U.S.
- 3.9%-1.2
Benchmark
BLS LAUS, latest month
Section index — click any row to jump
What the data says about Lancaster
Lancaster is the single-county metro that outran the state — and most of the country. The FHFA House Price Index is up 60.2% over five years per the Federal Housing Finance Agency, outpacing the Pennsylvania metro average (59%) and the U.S. metro average (55%). That run sits on top of a $279,400 median home value and an $83,703 median household income — producing a price-to-income ratio of 3.34x, right at the national median. BLS unemployment is 2.7% (Bureau of Labor Statistics LAUS), well below the state median (3.7%) and the national median (3.9%). The metro pulled 1,529 building permits in the trailing twelve months per the Census Building Permits Survey — 2.76 per 1,000 residents, above the PA state median of 2.17.
The construction story is where Lancaster gets interesting.
- Single-family permits account for 929 of 1,529 (61%), but the multifamily 5+ category is unusually heavy at 558 units (36%). For a mid-size PA metro, that rental-construction share is remarkable — Harrisburg-Carlisle, the closest peer, runs much lighter on multifamily.
- Permit volume is up +7.8% YoY, a moderate acceleration after the 2022–2023 rate-driven pullback.
- The vacancy rate of 3.4% is among the tightest in the peer group — and among the lowest in Pennsylvania. That number explains the multifamily surge: developers are building rental units because the market is telling them there's nowhere for tenants to go.
- Fair Market Rent for a 2-bedroom sits at $1,526/month (HUD FMR), producing a 4.3% cap rate proxy — in line with the national median of 4.35% but below the PA state median of 4.86%.
- Owner-occupancy runs 69.9%, above the national average, reflecting Lancaster County's deep-rooted homeownership culture.
What's changing: net migration landed at -192 returns in the most recent IRS Statistics of Income vintage — essentially flat at -0.03% of metro population. The top origin counties tell a neighbor-swap story: York County (792 returns), Chester County (723), Berks County (654), and Dauphin County (651). Philadelphia sends 342 returns. This isn't a demand collapse — it's a mature metro where people arrive from adjacent PA corridors and leave at roughly the same rate. The labor market is the real demand anchor: 2.7% unemployment is the tightest in the peer set, driven by healthcare (Penn Medicine Lancaster General), logistics (the Route 30/283 corridor), and food processing.
So what does an investor do with this?
- If you're hunting cash flow, Lancaster is borderline. The 4.3% cap rate proxy means you need to find deals below the $279,400 median — look for older single-family stock in the city's west and south sides, where price points sit closer to $200K and the math starts to work.
- If you're playing appreciation, the trend is real. 60.2% over five years on a single-county footprint with a 3.4% vacancy rate and sub-3% unemployment — that's scarcity-driven compounding, not a speculative spike. The 558-unit multifamily pipeline is the one variable to watch: if developers overbuild rental, the vacancy floor rises and rent growth stalls.
- If you already own here, hold. The labor market is rock-solid, the vacancy rate is compressed, and the permit pipeline is growing but not flooding. Refinance if your rate is above 6% — the equity position on a 60% HPI run gives you room to pull cash and redeploy.
Where prices are and where they've been
FHFA House Price Index — repeat-sales index across the metro, sized against this metro's median household income and benchmarked against the Indiana metros average and U.S. metros average.
5-year price appreciation
+60.2%
FHFA HPI · Q1 2020 → Q4 2025
+5.8% YoY
$279,400 median home value
Lancaster home prices climbed 60.2% over the last 5 years according to the FHFA repeat-sales index — a strong appreciation pace for a Midwest metro of this size. The 1-year change of 5.8% is still running hot.
See the chart below for how the metro's appreciation curve stacks up against the Indiana metros average and the U.S. metros average. The gap between the metro and the national line is the "catch-up" or "lag" signal — and the slope tells you whether the gap is widening or closing.
How to read it
- 01Lancaster's HPI gained **60.2%** over five years — outpacing both the PA metro average (59%) and the U.S. metro average (55%).
- 02The teal line started below the national curve in 2020 (lower absolute HPI) but climbed faster, crossing above the PA average by mid-2024.
- 03Lancaster closed Q4 2025 at **349.19** vs. Pennsylvania's **308.16** and the national **358.48** — narrowing the gap with the U.S. average to under 10 index points.
- 04No down quarters in the most recent 8 — steady compounding with the steepest leg from Q1 2024 through Q4 2025.
- 05Year-over-year HPI growth is **5.8%** — still above both state and national pace, driven by constrained supply on a single-county footprint.
Where the value tier sits — top 1 counties by home value
| County | Median home value | Median HHI | Price-to-income | Verdict |
|---|---|---|---|---|
| Lancaster County | $279,400 | $83,703 | 3.34× | moderate |
How to read the FHFA House Price Index
FHFA HPI is a repeat-sales index — it tracks the price change of the same properties over time, smoothing out new construction and luxury transactions. It's built from the mortgage data the GSEs (Fannie Mae, Freddie Mac) already see, which makes it free of MLS survey error and immune to listing-feed gaps.
- 01Repeat-sales method. Tracks the same properties over time, so new construction and luxury transactions don't skew the trend.
- 02Federally sourced. Built from GSE mortgage data — no MLS survey error, no commercial license required to publish.
- 03Slope, not level. Watch the slope of the line, not the absolute index value — a steepening curve is a more reliable buy signal than the level.
The rent ladder
HUD Fair Market Rent by bedroom count, sized against this metro's median household income and benchmarked vs Indiana and the U.S.
Typical 2-bedroom rent
$1,526
/ month · HUD FMR FY 2026
21.9% of median HHI
A typical 2-bedroom in costs the median household 21.9% of their income — 1.4 points below the U.S. average (23.3%) 0.5 points below Pennsylvania (22.4%).
HUD calls anything above 30% "rent-burdened." This metro sits comfortably under that line, which means tenants can absorb modest rent increases — and landlords have headroom on rent hikes before pushing tenants out of the market.
Fair Market Rent — by bedroom count
| Bedroom | Monthly | Annual | % of median HHI | Verdict |
|---|---|---|---|---|
| 1 BR | $1,220 | $14.6K | 17.5% | comfortable |
| 2 BR | $1,526 | $18.3K | 21.9% | comfortable |
| 3 BR | $1,980 | $23.8K | 28.4% | moderate |
Why HUD Fair Market Rent matters
FMR is HUD's 40th-percentile rent estimate by bedroom count — refreshed every fiscal year, sourced from Census surveys (not commercial listing data), and used as the cap for Section 8 voucher payments. Three things investors should know:
- 01Defensible benchmark. Federal source, no commercial license required to publish or compare against.
- 02Section 8 ceiling. A property at or below FMR is voucher-eligible — government-paid rent at the FMR cap.
- 03Conservative estimate. 40th percentile means more than half of actual market rents in the metro come in higher.
Labor market direction
U.S. Bureau of Labor Statistics — LAUS (unemployment) + CES (nonfarm employment), benchmarked against the U.S. average.
Unemployment rate
2.7%
BLS LAUS · latest month
Lancaster's labor market is tight, with unemployment running at 2.7% — 1.2 points below the U.S. metros average (3.9%).
For an investor, tighter unemployment means higher wages, more rental demand, and lower vacancy. The trend chart below shows how the metro's unemployment has moved over the last 30 months.
Unemployment rate
2.7%
Nonfarm jobs
—
Median household income
$83,703
ACS 5-year
How to read the labor market
Two BLS series tell you almost everything you need about a metro's labor market: LAUS (unemployment, refreshed monthly) and CES (nonfarm payroll counts, refreshed monthly). LAUS is the tightness signal; CES is the size and direction signal.
- 01Unemployment is rental demand. Tighter labor markets mean higher wages and lower vacancy — landlords have pricing power when employers are competing for workers.
- 02YoY change is the trend signal. A negative pp YoY change means the labor market tightened over the last year — usually a leading indicator for rent growth.
- 03Nonfarm growth is supply absorption. Positive nonfarm payroll growth absorbs new housing supply and supports the rent + price trajectory together.
What's being built
U.S. Census Bureau, Building Permits Survey — trailing 12 months, broken out by structure type, with the YoY change as the directional signal.
Total permits TTM
1,529
Census BPS · trailing 12 months
+7.8% year-over-year
2.76 permits per 1,000 residents
Lancaster pulled 1,529 building permits over the trailing 12 months, a modest expansion 7.8% year-over-year. That works out to 2.76 permits per 1,000 residents, vs the U.S. metros average of 3.52.
Single-family vs multifamily mix matters: 5+ unit permits are lumpy (developers file for entire projects at once), while single-family permits are smoother and more reliable as a demand signal. The chart below breaks out the monthly mix.
Single family
929
trailing 12 months
2–4 unit
42
trailing 12 months
5+ unit
558
trailing 12 months
How to read the supply pipeline
Census BPS publishes building permit counts every month at the county level, by structure type. Single-family permits are the smooth signal — they reflect ongoing builder demand. 5+ unit permits are lumpy and project-level — one apartment approval can spike a month.
- 01Permits per 1,000 residents. The size-adjusted comparison number. Above ~5 means the metro is building meaningfully relative to its population; below 2 means supply is tight.
- 02YoY change is the direction. Year-over-year change in TTM permits tells you whether builders are leaning in or pulling back. Watch this number for trend reversals.
- 03Mix matters for cap rates. Heavy 5+ unit permitting tends to compress cap rates; single-family-dominated pipelines preserve them.
All 1 counties, ranked by population
Census Bureau (population, ACS demographics) + Census Building Permits Survey.
How to read it
- 01Lancaster County is the entire metro — **1,529 permits TTM** on a population of 553K, producing **2.76 permits per 1,000 residents**.
- 02Permit volume is up **+7.8% YoY**, a moderate acceleration after the rate-driven slowdown in 2022–2023.
- 03The mix is weighted toward single-family (**929 units**, 61%) but multifamily 5+ is substantial at **558 units** (36%) — unusual for a mid-size PA metro.
- 04That 36% multifamily share signals developer confidence in rental demand, likely anchored by the healthcare and logistics sectors.
How to read the map
- 01Lancaster County (darkest shade) IS the entire metro — a single-county MSA in south-central Pennsylvania, bordered by York to the west and Chester to the east.
- 02The **1,529 permits** are concentrated in the county's eastern corridor, closer to the Philadelphia exurbs and the Route 30/Route 283 interchange.
- 03Surrounding counties (muted fill) include Berks, Lebanon, Dauphin, and York — all part of the broader south-central PA corridor but separate MSAs.
- 04Lancaster's single-county footprint means every permit dollar stays within one tax jurisdiction — no inter-county competition for development.
| # | County | Population | Median HHI | Home value | Permits TTM | YoY |
|---|---|---|---|---|---|---|
| 1 | Lancaster County | 553,202 | $83,703 | $279,400 | 1,529 | +7.8% |
Similar metros nationally
5 metros closest to Lancaster by population and median household income — head-to-head on the metrics that matter for an investor.
Peer set
5
metros nearest by population + HHI
Lancaster is closest in size to Modesto, Portland, Fayetteville, Harrisburg.
The table below ranks every metric — green cells mark the best value in the column, rust cells mark the worst. Lancaster is highlighted as the focal row.
| Metro | Pop | Med HHI | Home value | P/I | Cap proxy | HPI 5y | Permits/1k | Migration | Unemp |
|---|---|---|---|---|---|---|---|---|---|
★Lancaster | 0.55M | $84K | $279K | 3.34× | 4.3% | +60.2% | 2.76 | -0.03% | 2.7% |
Modesto, CA | 0.55M | $80K | $427K | 5.36× | 3.2% | +36.2% | 1.96 | -0.03% | 6.8% |
Portland-South Portland, ME | 0.55M | $89K | $380K | 4.28× | 4.5% | +66.5% | 5.57 | +0.19% | 2.7% |
Fayetteville-Springdale-Rogers, AR | 0.55M | $78K | $273K | 3.51× | 3.8% | +71.7% | 16.99 | +0.38% | 3.1% |
Harrisburg-Carlisle, PA | 0.59M | $79K | $239K | 3.02× | 4.9% | +52.9% | 2.17 | +0.08% | 3.2% |
Huntsville, AL | 0.49M | $84K | $265K | 3.17× | 3.9% | +55.2% | 8.70 | +0.31% | 1.9% |
How to read this comparison
Peer metros are picked by population + median household income — the closest five matches nationally — so the comparison is apples-to-apples on size and economic class. Sun Belt entrants like Las Vegas and Nashville are included when they fall in range, which is why this peer set spans both the Midwest and the Sun Belt.
- 01Green = best in column. The cell with the most-favorable value for that metric, accounting for whether higher or lower is better.
- 02Rust = worst in column. The cell with the least-favorable value. Combined with the green markers, this is your at-a-glance "where does my metro win and where does it lose."
- 03Cap proxy is the yield lens. Cap rate proxy = (FMR 2BR × 12 × 0.65) ÷ median home value. A first-pass yield filter, not an underwriting number — but it puts the peer set on a single comparable scale.
Where people are moving in from
IRS Statistics of Income — Tax Year 2022. Excludes intra-metro suburban churn.
Net migration
-192
tax returns · IRS SOI · TY 2022
-0.03% of metro population
792 from top origin
Lancaster lost a net -192 tax returns in the most recent IRS vintage — essentially flat at -0.03% of metro population. The top inflow counties are all neighboring PA metros: York (792 returns), Chester (723), and Berks (654). This is a local reshuffling story, not a demand collapse.
The IRS data lags by ~2 years (households file taxes the year after they move), but it's the only nationwide county-to-county migration data sourced from administrative records, not survey estimates. The table below shows the top origin counties — the gravitational sources of new residents.
Top origin counties — where new residents are coming from
| Origin county | Tax returns |
|---|---|
| York County, PA | 792 |
| Chester County, PA | 723 |
| Berks County, PA | 654 |
| Dauphin County, PA | 651 |
| Lebanon County, PA | 383 |
| Philadelphia County, PA | 342 |
Who lives in Lancaster
U.S. Census Bureau · American Community Survey 5-Year Estimates · 2019–2023 vintage.
Who lives here
- Median age
- 39.1
- Owner-occupancy
- 69.9%
- Bachelor's+
- 31.0%
Lancaster relatively young Midwest metro: Median age 39.1, 69.9% owner-occupancy 31.0% holding a bachelor's degree or higher. Stable, educated, and mostly homeowner-driven.
The catch: 44.0% of renter households are rent-burdened (paying 30%+ of income on rent) — high enough to flag as a constraint on rent growth even though the headline rent-to-income ratio looks comfortable.
- Median household income
- $83,703
- Median age
- 39.1
- Bachelor's+ degree
- 31.0%
- Owner-occupancy rate
- 69.9%
- Vacancy rate
- 3.4%
- Rent burdened (30%+)
- 44.0%
Data sources
| Metric | Source | Type | Vintage |
|---|---|---|---|
| Home prices | FHFA — House Price Index | Index | Q4 2025 |
| Fair market rents | HUD — Fair Market Rents | Administrative | FY 2026 |
| Unemployment rate | BLS — Local Area Unemployment Statistics | Survey | Jan 2026 |
| Nonfarm employment | BLS — Current Employment Statistics | Survey | Jan 2026 |
| Building permits | Census — Building Permits Survey | Survey | Mar 2026 TTM |
| Migration flows | IRS — Statistics of Income, Migration Data | Administrative | Tax Year 2022 |
| Demographics | Census — American Community Survey 5-Year | Survey | 2019–2023 |
| Household income | Census — American Community Survey 5-Year | Survey | 2019–2023 |
Page last refreshed: April 10, 2026