The 2020 Census revealed much about how the United States population has changed over the last 10 years. The timing of the census happened to coincide with the COVID-19 pandemic, which has had far-reaching effects on how Americans live and work. The pandemic continues to impact housing, employment, and living arrangements for the U.S. population. That has us wondering: how might the findings of the 2020 Census change in 2021?
Let's have a look at some of the biggest trends uncovered by the 2020 Census and explore how they may have continued to change moving into 2021.
People Leaving California and New York
New York City remains the country's largest city by population, with 8.8 million residents. Yet, the 2020 Census revealed that more than 1.4 million people moved away from the city since 2010. There is some evidence that the rate of exodus is increasing with an extra 126,000 residents moving away between 2019 and 2020.
Those leaving cite rising taxes, high cost of living, and poor job growth as primary reasons. The threat of COVID-19 and more flexible work arrangements continue to stimulate migration from NYC. So far this year, more than 100,000 people have filed change of address forms indicating they are leaving the city. That is more than twice the usual amount, according to ABC 7.
Similar factors are leading folks to leave the city of Los Angeles and the state of California as a whole. As a result of the 2020 Census, California lost a seat in Congress for the first time in its history.
California’s 2020 population came in at 39,538,223. That’s an increase of about 2.3 million people from a decade ago, representing a 6.1% increase. That rate of growth ranked California 24th among other states growth—households leaving the state kept the rate of growth low.
Signs point to further reductions in California's population in 2021 and beyond. The state reported the population dropped in 2020 by 0.46%, or 182,083 people. Lower rates of immigration and births contributed to the decline in population. Combined with COVID-related moves and flexible working arrangements, California's population will likely continue to decline.
Employees Working from Home
The 2020 Census found that U.S. metro increased in population by 9% over the last 10 years. That resulted in 86% of the population living in a metro area, a 1% increase from 2010. A total of 312 out of the 384 designated metro areas grew in population from 2010 and 2020.
The coronavirus pandemic has changed the way Americans work. More and more employees are working from home. This is possible thanks to video conferencing and other online technology. A growing number of workers find themselves able to work remotely, even after vaccines have made it safer to return to the office. This means folks can live anywhere they want without worrying about commuting.
This flexibility is leading many people to move to areas of the country with a lower cost of living. Most people moving out of cities are heading to suburbs and surrounding counties. Many others are moving to smaller towns and cities around the country.
The Surge in Real Estate Investing
With more people on the move, 2020 and 2021 have seen one of the hottest housing markets in recent memory. Strong demand, but low inventories, have led to rising prices in many markets. Home prices rose more than 10% year-over-year in 46 of the top 50 metros, according to Zillow economists.
Another factor leading to inflated real estate prices is the activity of major Wall Street investment firms, like Blackstone spin off Invitation Homes. Such firms have invested billions to buy single family homes in key residential markets across the country. These firms have increased competition for would be homebuyers as they provide sellers with reliable cash offers. Institutional investors look to buy homes in areas with rising populations. There, they can look forward to commanding strong rents for years to come.
High home prices may discourage some potential homebuyers and keep them renting instead. It may also encourage people to move to places with more affordable housing in 2021 and beyond.
Building More Housing
The number of housing units in the United States increased 6.7% from 2010 to 2020. That is a total of more than 140 million homes. Texas added the most units over the decade, a total of 1.6 million homes. West Virginia and Puerto Rico were the only two areas that lost housing units.
Despite the increase in housing units, there is still not enough to meet demand — leading to the high prices discussed before. The increase in housing units has been confined to metro areas. Rural areas have lost housing units. Demand for more affordable housing is strong, but construction of new homes is increasing slowly. This is due to the increasing cost of materials, as well as challenges in securing labor for construction. Additionally, suitable land sites in desirable areas is getting harder to come by.
So far this year, the number of housing permits, starts, and completions are outpacing last year. This might not drastically reduce prices or cause any sudden changes to migration patterns. But it may create more opportunities for some Americans to move — meaning it's a great time to get your real estate license.
America Is Always Changing
While the government is still parsing through the results of the 2020 census, the results have painted a basic picture of the country. People continued to move out of major population centers like New York and Los Angeles. Many employees continued to work from home and moved to areas they could not live before when they were commuting. Home prices surged, with investment capital buying much of the housing stock. New housing stock is slow coming, but more is on the way.
Every census is a snapshot in time, and these results were a perfect glimpse at the mess that was 2020. But they also provide valuable insights about how people are living, working, and moving in 2021.