Population fluctuations significantly influence local housing markets by directly affecting housing demand. Sustained population growth, helps to maintain long-term upward pressure on home prices and rents.
LendingOne’s top-line findings:
- 60% of U.S. counties gained population in 2023
- The most significant population gains were once again observed in the U.S. Southeast, Mountain West, and Texas.
- The most significant population declines were in pockets of the Midwest, Northeast, and California.
For the analysis, LendingOne sourced data from the U.S. Census Bureau. Let’s take a closer look at the year-over-year change between 2022 and 2023.
The map above illustrates the ongoing rapid population growth in Sun Belt markets such as Florida and east/central Texas. These regions benefit from favorable climates, economic opportunities, and appealing lifestyle amenities, attracting both domestic migrants and international immigrants.
Compared to cities like Seattle and New York City, Sun Belt counties like Harris County, Texas (Houston) and Hillsborough County, Florida (Tampa) are perceived as more affordable. Additionally, Tennessee, Texas, and Florida receive an extra boost due to their lack of state income tax.
Population dips in certain parts of the Northeast and Midwest can be attributed to aging demographics and the outmigration of younger residents. While the population decline in high-cost West Coast markets like Los Angeles County boils down to a lack of housing affordability.
While sustained population growth can hint at long-term upward pressure on rents and prices, don't be fooled into thinking that falling population means prices and rents have to fall in the short-term. Often they don't. In fact, most of the places with falling population right now are still seeing slight increases in single-family rents and home prices
What’s the big picture story?
The Sun Belt's sustained population growth underscores its status as the economic engine for expansion in the country, attracting both residents and businesses. That’s why it continues to be at the epicenter of housing sector investments, like build-to-rent.