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The IBR is a publication of the Indiana Business Research Center at IU's Kelley School of Business.

Executive Editor, Carol O. Rogers
Managing Editor, Brittany L. Hotchkiss

Lafayette forecast 2024

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Community Development Regional Extension Educator, Purdue University

The Lafayette Metropolitan Statistical Area (MSA) has become an attractive market to live and work with a relatively resilient economy. The region has attracted attention due to past rankings about career opportunities and real estate hot markets coupled with the prestige of Purdue University. The 2023 data show the region’s goods producing sector has experienced growth both in employment numbers and in wage levels, despite tight labor markets and housing inventory. Looking ahead to 2024, current economic conditions are signaling more tepid growth due to pressures from inflation and rising costs for both goods and labor.

The Lafayette MSA (defined in this article as Tippecanoe, Benton and Carroll counties unless otherwise noted)1 boasted a 2022 population of 217,991 individuals. Nearly 87% of this population is found in Tippecanoe County (188,717 residents), followed by Carroll County with its population of 20,555. Over the last decade (2012-2022), the Lafayette MSA has grown by 9,874 residents. Since 2000, the region has gained approximately 39,000 residents, with the vast majority of this growth occurring in Tippecanoe County. This growth underscores the attraction of Purdue University and its related economic activity. Looking forward, the Indiana University Center for Econometric Model Research (CEMR) projects an increase of nearly 1,900 residents (0.8% growth) in the region in 2024, pushing the total population count to 221,820 individuals (see Figure 1).

Figure 1: Annual Lafayette MSA population

Line chart showing the Lafayette MSA population from 2000 to 2022 and the projected population from 2023 to 2025. With the exception of a dip in 2020, the line gradually increases.

Note: Data for 2023 through 2025 are projections.
Source: U.S. Census Bureau and Indiana University Center for Econometric Model Research


In the 2023 forecast, it was noted that the strong headwinds of inflation, rising labor costs and worker shortages had the potential to affect the Lafayette MSA, causing fewer employed individuals and unemployment rates in the 3% or 4% range. Table 1 reinforces the impact of those headwinds, as the U.S. Bureau of Labor Statistics September 2023 preliminary data noted a year-over-year drop of more than 2,100 workers in the labor force. Compared to Indiana and the nation, residents are largely able to find work as noted by the consistently lower unemployment rate in the Lafayette MSA. Despite the region continuing to grow its population, the labor force has not returned to its November 2019 peak of 115,210 workers. Admittedly, not all population growth equates to working-age individuals, but the low unemployment rate emphasizes the ability of individuals to participate in the labor force.

Table 1: Labor force and unemployment for the Lafayette MSA

Year Month Labor force Employment  Unemployed Lafayette MSA unemployment
Indiana unemployment
2022 August  112,361 109,021 3,340  3.0 3.2 3.8
September 111,972 109,504 2,468 2.2 2.5 3.3
October 112,914 109,621 3,293 2.9 3.0  3.4
November 112,712 109,649 3,063 2.7 2.9 3.4
December 112,333 109,989 2,344 2.1 2.6 3.3
Annual 112,316 109,152 3,164 2.8 3.0 3.6
2023 January 109,170 105,922 3,248 3.0 3.4 3.9
February 110,322 106,735 3,587 3.3 3.5 3.9
March 110,721 107,262 3,459 3.1 3.5 3.6
April 110,354 107,795 2,559 2.3 2.6 3.1
May 110,654 106,849 3,805 3.4 3.5 3.4
June 107,428 103,625 3,803 3.5 3.7 3.8
July 108,765 104,458 4,307 4.0 4.0 3.8
August 108,012 104,324 3,688 3.4 3.7 3.9
September* 109,857 106,636 3,221 2.9 3.3 3.6

*Preliminary data
Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Looking forward to 2024, it is anticipated that a slight uptick of employment may occur in comparison to the 2023 data. The MSA will likely maintain a tight labor market, with employers competing for workers in a limited pool of candidates. It is possible for the unemployment rate to stay steady in the 3% or 4% range as the economy continues to slowly grow with the persistently higher inflation rates, increased labor costs and costs of goods. 

Table 2 examines the regional employment between 2022 and 2023 in the Lafayette MSA. In the first nine months of 2023, the MSA saw a drop of 2,200 jobs (-2.1%). The service-providing sector experienced the job losses, namely the government (-3,911 jobs) and the trade, transportation and utilities (-178) sectors. Demand for the goods producing sector (+578), leisure and hospitality (+711) and private educational and health services (+400) was evident by the increased number of jobs. Manufacturing remains the largest sector in the Lafayette MSA, comprising 20% of all jobs, and it also experienced a gain in jobs (+367). 

Table 2: Lafayette MSA employment by industry

Industry 2023* Change since
Percent change,
Total nonfarm 104,100 -2,200 -2.1%
Total private  83,411 1,711 2.1%
Goods producing 24,978 578 2.4%
Manufacturing  20,567 367 1.8%
Mining, logging and construction 4,411 211 5.0%
Service-providing  79,122 -2,778 -3.4%
Private educational and health services 13,800 400 3.0%
Trade, transportation and utilities 14,722 -178 -1.2%
Leisure and hospitality 11,411 711 6.6%
Professional and business services 10,533 33 0.3%
Financial activities 3,411 11 0.3%
Information 722 22 3.2%
Other services 3,833 33 0.9%
Government 20,689 -3,911 -15.9%

*January through September data annualized for 2023. September data are preliminary.
Note: Data are not seasonally adjusted. 2022 data are annual averages.
Source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES)

The CEMR has employment projections using two different sources of data: QCEW and LAUS.2 Interestingly, they have differing forecasts, with the LAUS data showing minimal year-over-year employment growth in the first half of 2024 and an improved outlook in the second half of the year (-0.10% in Q1, +0.55% in Q2, +2.17% in Q3 and +1.79% in Q4). Conversely, the QCEW forecast anticipates a year-over-year decline in employment in all four quarters of 2024, yet follows a similar pattern as the LAUS data. In essence, it is anticipated the Lafayette MSA can expect a continued downturn in employment through 2024 Q3 followed by modest employment growth in the final quarter of 2024 (+1.3% between Q3 and Q4).

First quarter 2023 wage data is the most recent information we have at the time of this writing. Since 2022 Q1, there has been a 4.2% change in total jobs and an astounding 10.0% increase in average weekly wages (see Table 3), which builds upon the previous year’s 7.7% growth in average weekly wages. This wage growth in the past two years has been unusually strong compared to the past decade. This strong increase in weekly wages represents the strong demand for workers and the necessity of employers to offer increased wages to make employment attractive for the prospective worker – who is experiencing their own economic headwinds with higher inflation affecting living expenses. Sectors that had the largest wage growth were manufacturing (+17.9%), construction (+14.9%) and wholesale trade (+13.5%). Looking forward into 2024, given the rapid wage growth in the past two years, the average weekly wage growth will likely begin to cool to coincide with slower economic growth. Growth will likely hover around the 2% to 5% range and be varied across industries, depending on business demand.

Table 3: Average weekly wages in the Lafayette MSA

Industry Average weekly wage, 2023 Q1 Change in jobs since 2022 Q1 Change in average weekly wage since 2022 Q1
Total $1,117 4.2% 10.0%
Utilities $2,359 6.3% 6.1%
Management of companies and enterprises $1,652 20.8% 4.4%
Finance and insurance $1,675 1.1% 7.7%
Professional, scientific and technical services $1,560 1.1% 4.8%
Manufacturing $1,613 6.2% 17.9%
Educational services $1,408 3.7% 6.1%
Wholesale trade $1,506 6.5% 13.5%
Mining $1,082 -6.3% -1.2%
Construction $1,258 7.0% 14.9%
Health care and social services $1,062 5.2% 2.8%
Public administration $1,023 11.8% 8.1%
Transportation & warehousing $1,026 2.5% 11.5%
Information $999 -0.4% 7.1%
Real estate and rental and leasing $970 2.4% 9.2%
Agriculture, forestry, fishing and hunting $827 -8.2% 4.6%
Other services (except public administration) $817 5.1% 12.8%
Retail trade $660 -1.5% 6.5%
Admin. & support & waste mgt. & rem. services $620 2.2% 12.3%
Accommodation and food services $379 3.3% 12.5%
Arts, entertainment and recreation $325 37.6% 9.4%

Note: Mining; utilities; manufacturing; rest estate and rental and leasing; educational services; and arts, entertainment and recreation industries exclude county data that are not available due to non-disclosure requirements.
Source: STATS Indiana, using Quarterly Census of Employment and Wages (QCEW) data

In 2021, the Lafayette MSA per capita personal income (PCPI) increased to $46,968, a gain of $3,013 since 2020 (+6.9%). The latest data covers the brunt of the COVID-19 pandemic time frame, thus some of this growth is likely propped up by the distribution of government funds to families and businesses during the economic distress. Nationally, the 2021 PCPI was $64,430 (and it jumped to $65,470 in 2022); the region consistently lags behind the nation’s PCPI due to a different occupational mix and lower pay scales at the highest-earning tiers. Additionally, the greater Lafayette area is a college town, with large quantities of individuals generating minimal amounts of income—which pulls down the PCPI figure. The PCPI gap between the Lafayette MSA and the nation improved between 2020 and 2021 to 72.9% of the national figure, a difference of $17,462. Compared to statewide figures, the MSA lags Indiana’s PCPI by $9,966. Despite these gaps between national and state figures, the region’s PCPI has grown by 41.1% since 2011, equivalent to $13,685. The 2022-2026 projection for the MSA’s personal income shows a 3.91% annual growth with a sizable jump in 2022 (+4.42%) and 2024 (+4.21%).


In February 2023, the Wall Street Journal/Realtor.com Winter 2023 Emerging Housing Markets Index put Lafayette-West Lafayette as the No. 1 emerging market in America.3 The data continue to show that not only is this MSA a hot market, but it is also one with limited inventory. As of September 2023, the year-to-date figures for the real estate market in the Lafayette MSA reflected drops in three areas:  housing inventory (-8.7%), new listings (-19.6%) and closed sales (-20%), as shown in Table 4. The limited number of homes for sale caused 2023 to remain as a seller’s market, as median sales prices ticked upwards in all three counties, ranging from up 2.4% in Carroll County to up 10% in Tippecanoe County since 2022. The story is similar in each county – fewer listings resulting in fewer sales. Benton County was the only county in the MSA that had a slight growth in inventory of homes for sale, but all counties only have between one and two months of supply of homes that can be bought/sold. These trends are following predictions and future expected trends. The Lafayette MSA’s housing market will keep tightening and prices may continue to be pushed slightly upward due to lack of supply of homes.

Table 4: Lafayette MSA residential real estate sales

  Lafayette MSA Benton County Carroll County Tippecanoe County
  2022 2023 Change 2022 2023 Change 2022 2023 Change 2022 2023 Change
New listings 2,135 1,716 -19.6% 98 92 -6.1% 151 133 -11.9% 1,886 1,491 -20.9%
Closed sales 1,888 1,510 -20.0% 83 78 -6.0% 149 108 -27.5% 1,656 1,324 -20.0%
Median sales price n/a  n/a  n/a  $150,000  $155,000 3.3%  $185,000  $189,375 2.4%  $250,000  $275,000 10.0%
Months supply of inventory n/a n/a n/a 1.8 2.3 27.8% 1.2 1.6 33.3% 0.9 1 11.1%
Inventory of homes for sale 206 188 -8.7% 18 19 5.6% 20 19 -5.0% 168 150 -10.7%

Note: Data reflect January to September for both years. Months supply of inventory and inventory of homes for sale are September values.
Source: Indiana Association of Realtors and Realtor.com Economic Research

Nationally, the highest interest rates in 20 years have impacted borrowing activity. The housing market has slowed down and this is expected to continue in the near future. The need for additional inventory of homes within the Lafayette MSA and throughout the nation still exists. The construction industry in the Lafayette MSA is still growing and builders will continue to fulfill housing projects, but the pool of clientele who can afford to undertake new housing projects will likely contract.

Surprisingly, despite the strong economic headwinds affecting the housing industry in 2022, the number of housing permits issued in the four-county MSA region (including Warren County) increased 28.4% over 2021, totaling 1,518 permits. The preliminary 2023 housing permits data also reflect a 9.4% increase in issued permits (see Figure 2). Looking closely at the data, much of this growth is driven by permits issued for units with five or more families rather than single-family homes, accounting for approximately 75% of the issued permits. Over the past decade (2013-2023), 5,500 housing permits have been issued to build single-family homes and another 7,554 housing permits were issued for 5-or-more-family units. Several of these multi-family units have been built in the Lafayette and West Lafayette areas, changing the skyline and look of the Purdue University campus. Looking ahead to 2024, if interest rates improve, building permits for single-family homes will likely increase due to pent-up demand. Thus, it is anticipated that the number of housing permits issued will remain steady.

Figure 2: Lafayette MSA residential building permits

Line chart showing the total number of residential building permits issues in the Lafayette MSA from 1990 to September 2023.

Note: 2023 data are year-to-date figures through September. The MSA region shown includes Benton, Carroll, Tippecanoe and Warren counties.
Source: STATS Indiana, using U.S. Census Bureau data


Despite increases in average weekly wages, per capita personal income and population, the Lafayette MSA experienced declines in employment, labor force participation and housing inventory in 2023. Projections for 2024 are signaling a slowdown in the first half of the year before regaining strength. The region may experience higher wage levels, per capita personal income growth and increased housing development, but at a slower pace dependent on the Federal Reserve’s inflation monetary policies. The Lafayette MSA's 2024 growth will likely be challenged by these external factors, similar to many other MSAs throughout the country.


  1. Warren County was added to the Lafayette MSA in the 2018 metro delineations. However, federal databases still mostly report based on the older delineation.
  2. For a quick primer on the differences between the QCEW, LAUS and CES databases: https://www.dws.state.nm.us/Portals/0/DM/LMI/So_Which_Employment_Numbers_Do_You_Use.pdf
  3. “Four Indiana communities named ‘hot markets,’” Inside Indiana Business, February 2023. https://www.insideindianabusiness.com/articles/four-indiana-communities-named-as-hot-markets?utm_source=inside-edge-morning-briefing&utm_medium=newsletter&utm_campaign=2023-02-02