Statistically Speaking: Will City Dwellers Return? Market Population Losses and Gains During the Pandemic

May 17, 2022  by HFBusiness Staff in Business Strategy, Industry   

This issue of Statistically Speaking focuses on population growth between April 1, 2020 and July 1, 2021 – 15 key months of the pandemic. The majority of people that moved during the pandemic did not go far, staying within their states or just outside the “core” of the city. Mid-size markets, those with populations 250,000 to 999,000 received the greatest influx of new residents. And while the pandemic did cause a large migration out of densely populated cities, the trend diminished during the second year of the pandemic.

Meanwhile, the furniture and home furnishings industry seemed to operate in its own unique economic environment during the pandemic months – unrelated to the population migration. Once all retail reopened, a pandora’s box of demand, spurred by stimulus checks, and the consumer’s seemingly renewed love affair with their homes, created a potential bubble that has stretched throughout 2021. (See the “Retail Metrics” cover story in this issue of the magazine.) The question furniture retailers have going forward is will these population dynamics continue or can the big cities lure them back.

The slowing in the rate of population growth is an alarm bell sounding for the furniture and home furnishings industries. As shown in Table A, the rate of U.S. total population growth has been declining well before 2020, dropping each year since 2015. Between 2015 and 2020, population grew from 320.7 million to 329.5 million. During the peak of the COVID pandemic, the growth slowed to a historical rate of 0.1%.

The main components to population change are births, deaths and international immigration (Figure 2).

Prior to April 2020 and the pandemic, the number of births were falling each year since 2016. However, during the 15-month period from April 1, 2020 to July 1, 2021, a whopping 4.5 million babies were born at an increase of 19.4% (Table B).

Deaths were slowly increasing from 2015 to 2020 as Baby Boomers continued to age (Table C). That number skyrocketed 39.6% during the 15-month pandemic peak (April 1, 2020 to July 1, 2021) as deaths reached 4.3 million. Note that the large population cohort of Baby Boomers has been the key stimulus of furniture spending for decades and has continued well into the now-declining 65 and over age group.

Immigration has been slowing rapidly since 2016 due to major policy change during the Trump presidency (Table D).

The pandemic brought a virtual standstill in immigration, resulting in a decline of 46.2% during the peak of the pandemic (April 1, 2020 to July 1, 2021). However, with the looming repeal of U.S. Title 42 (at press time), immigration is once again heating up politically and numerically.

State Population Changes
19 states plus the District of Columbia lost population during the 15 key months of the pandemic, with highly populated states representing the bulk of the losses. New York decreased by 365,446 people, California by 300,387 and Illinois by 141, 039. Top states that gained population were Texas at 382,436 people, Florida at 242,941, Arizona at 124,814, North Carolina at 111,774 and Georgia 87,658 (Table E). Many movers flocked to warmer weather with lower cost of living. While 38% of states lost population during the height of the pandemic, many have actually been losing population slowly for years. The most notable population losses over time are West Virginia since 2013, Illinois since 2014, and New York since 2016. The pandemic merely accelerated those losses.

The majority of states, 68%, gained population during the key pandemic period, with Idaho experiencing the highest percentage growth of 3.4%, a sizable gain, and New York suffering the highest percentage population loss of 1.8% (Table F).

Market Population Change

As shown in Table G, mid-size markets with populations 250,000 to 999,000 as a group were the largest recipients of the pandemic flight from core counties within the largest markets (population over one million). These mid-size markets grew by 509,300 people during the 15-month pandemic period – April 1, 2020 to July 1, 2021, while the largest markets with populations 2.5 million and over lost 352,800 people. The 146 mid-sized markets represent 23% of the U.S. population but received 115% of the total U.S. population change during the key pandemic months.

The U.S. Department of Commerce breaks out the MSA counties into two categories – central and outlying. The larger markets, over one million in population, are further segmented into a third category called “core” that reflects the county or counties of the principal city of the large market. In April 2020 at the start of the pandemic, over 100 million people (38% of the U.S. population) lived in 68 core counties within 66 large metropolitan areas (MSAs with population 1 million and over). The core counties of these 66 largest metro areas lost almost one million in population during April 2020 to July 2021.

Big MSAs had been growing for decades. And as Millennials hit the workforce in mass over the last two decades, there was a large push in all markets, regardless of size, to move into the core of the major city. The live/ work/play lifestyle became an attractive draw, despite escalating rents, home prices and higher taxes associated with “moving in”. The trend continued, with slower growth, until the COVID pandemic hit in the first quarter of 2020. The forced remote work-at-home took the workplace by storm and many adapted quickly. People began moving out of the core counties, some to the suburbs (referred to as central counties) and some even further away to outlying market counties. But many more moved out of the big cities entirely. Even some companies moved to different cities or states.

Between April 1, 2020 and July 1, 2021, core counties in the largest markets (2.5 million population and over) declined in population by 697,700 people, while the central and outlying counties within those 23 MSAs increased by 169,000 and 176,000 respectively (Table H). In the 1 million to 2.5 population group, which holds 43 MSAs, core counties lost 203,900 people as the central counties grew by 166,800 and the outlying counties by 116,800.

The top three MSAs with the highest population loss had been losing population before COVID, but the pandemic accelerated the pace dramatically. Both New York- Jersey City-White Plains, NY-NJ and Los Angeles-Long Beach-Glendale, CA markets began losing population in 2017 and Chicago- Naperville-Evanston, IL since 2015. As shown in Table I, the New York- Jersey City-White Plains, NY-NJ market declined 372,400 in population, followed by Los Angeles-Long Beach-Glendale, CA with a 184,500 loss and Chicago-Naperville- Evanston, IL with 108,100.

Phoenix-Mesa-Chandler, AZ led as the top market that gained in population during the key pandemic months, increasing population size by 100,300 (Table J). Texas markets took the following three spots: Dallas-Plano-Irving (87,400), Houston-The Woodlands-Sugarland (84,600), Austin-Round Rock-Georgetown (69,100), while Atlanta-Sandy Springs- Alpharetta, GA rounded out the top five with a gain of 54,200 people.

Smaller markets – Micro Statistical Areas – also gained population (0.2%) but not at the same rate as the mid-sized and smaller MSAs. However, some strategic Micro Areas did increase population by over 5%. Jefferson, GA grew 5.8% in population during key pandemic months, followed by Cedar City, UT at 5.6% and Sandpoint, ID at 5.1%.

The COVID pandemic was the first time in many years that Rural America, as a whole, gained in population. Although a small increase overall, almost half of 1,302 rural counties (46.7%) increased total population by 1.2%, while the remaining counties lost 0.9% of the population . Most of the population gains were in larger rural counties with access to small town amenities. Although the pandemic accelerated population shifts throughout the country, the trend to move out of city centers has slowed over the last year and experts have differing thoughts on population changes going forward. Stephen Whitaker, a policy economist at the Federal Reserve Bank of Cleveland was cited in a PEW research article as suggesting that the pandemic may have sped up a change already in the making, as Millennials reach middle age and look for more space to raise families. He also noted that commuting has become less of an issue as more employers allow remote work. Whitaker has studied pandemic moves using consumer surveys.

On the flip side, demographer William Frey, a senior fellow at the Brookings Institution’s metropolitan policy program, was quoted in the Los Angeles Times as saying he believes the growth of micro areas and decreases in the biggest metros will be temporary, taking place at the height of people moving during the pandemic when work-from-home arrangements freed up workers from having to go to their offices. “There is clearly a dispersion, but I think it’s a blip,” said Frey. According to USB Evidence Lab’s tracking of metro areas, “The outflow of residents from cities to suburbs and exurbs has slowed for permanent movers, and cities are once again growing.”