A nation’s economy is significantly impacted by its changing demographics. For instance, an aging population coupled with a declining birth rate points to a decline in future economic growth. Americans are having fewer children, and the baby boom of the 1950s and 1960s has yet to be repeated. It is with this in mind that I wanted to highlight recent data from the 2017 Census, and a related Wall Street Journal article titled “Retirees Reshape Where Americans Live”.
Census Bureau Findings
Let’s start with data released by the Census Bureau for July 1, 2016 to July 1, 2017, which shows that the Dallas-Fort Worth-Arlington area added 146,000 new residents and ranked #1 for growth among metropolitan areas in the U.S.
Maricopa County in Arizona saw a population increase of about 74,000—making it #1 for growth among counties in the U.S. Some of you may remember Maricopa County as the home of Joe Arpaio, who styled himself as “America’s Toughest Sheriff”.
Texas had six of the top 10 counties with the largest population increase—not the largest population, but the largest increase in population. Aside from Maricopa and Texas, the top 10 counties with the largest population increase included Clark County in Nevada, Riverside County in California, and King County in Washington, which includes Seattle and its high growth companies such as Amazon.
Net Domestic Migration
The primary driver of growth for the 10 fastest growing metro areas and counties was net domestic migration—people from other places within the U.S. flocking to these counties for jobs, business opportunities, and retirement options.
Looking at metro areas with the largest population, the New York metro area led with a population of 20.3 million people, followed by Los Angeles at 13.4 million, Chicago with 9.5 million, and Dallas at 7.4 million residents.
Locally, the Miami-Fort Lauderdale-West Palm Beach metropolitan area ranked #7 among most populous metro areas, with a population of 6.2 million. Boston rounded out the bottom with 4.8 million people.
Interestingly, rankings for the top 10 metro areas did not change at all from 2016 to 2017. Florida had two metro areas in 2017’s Top 10 for the largest gains: Orlando-Kissimmee-Sanford and Tampa-St. Petersburg-Clearwater.
The Graying Of America
Another 2017 Census Bureau report pointed to the graying of America and projected more older adults than kids by 2035 for the first time in U.S. history. Already, the U.S. has more middle-aged people than children, and by 2035, the Census Bureau projects that we will have 78 million Americans over the age of 65 versus 76.4 million minors below the age of 18—and this could have repercussions for future economic growth.
The driving force behind America’s aging are the baby boomers. Boomers swelled the ranks of the young when they were born and then of the workforce as they entered adulthood. Now, boomers will sizably expand the number of older adults as they retire.
Retirees Reshaping Where Americans Live
Now onto the Wall Street Journal article on how retirees are reshaping where Americans live. The 74 million soon-to-retire baby boomers will, over the coming decade, start relocating to traditional retirement hotspots and to some non-traditional places as well. Census figures show that almost 750,000 Americans moved to designated retirement spots in 2017, unshackled and buoyed by a sharp surge in home prices and stock portfolios since the 2007-2008 recession, giving retiring Americans the financial confidence to now relocate. And I expect this trend to continue in the years ahead.
New Retirement Destinations
While sunny Florida continued to attract retirees, other not-so-warm places, such as Jackson, Wyoming and Coeur d’Alene in Idaho, with their picturesque lakeside views, walking trails, and low property taxes, attracted retirees from higher-cost states such as California.
Suburbs Attracting Millennials
America’s suburbs also attracted retirees and millennial home buyers who could not afford expensive urban neighborhoods and liked the stability and conveniences of suburban life. 2017 census data showed that the suburbs of large metro areas saw a 1% increase in population last year, with large U.S. cities losing 437,000 people to the ‘burbs in 2017.
America’s 71 million millennials are also on the move, finally ready to leave the comfort of their parents’ homes because jobs are plentiful and well paying because the economy appears strong, and because mortgage interest rates are still near all-time lows making this a good time to buy a home. That said, the supply of starter homes continues to be tight, which is something I regularly address in my Real Estate Round-Up segment that airs every week. Changing millennial demographics are also reflected in the uptick in birth rates. In 2016, the birthrate among women aged 30 to 34 rose to its highest level since 1964 and was higher than the birthrate for younger women in the 25 to 29 age group.
To attract millennials and retirees, builders and city planners are making suburbia more attractive, with vibrant shopping plazas, hip restaurants and cafes within walking distance, good schools, safe gated communities, walking trails, gyms, yoga centers, etc. They’re calling them “surban” developments that give you an urban neighborhood feel in suburbia.
Rural Areas Largely Unchanged
Rural areas did not see a lot of change, with their population basically flat in 2017. Rustbelt areas continued to shrink, with Chicago, Cleveland, and Baltimore losing the most residents in 2017. There was a slight population increase in manufacturing areas where shuttered plants were reopened, perhaps on the hope that Trump’s tariffs might give America’s steel and aluminum industries a boost.
Clearly, Americans are on the move—as they have been for centuries. What’s slightly different this time is the combination of 74 million baby boomers approaching retirement and the 71 million millennials who are ready to take their place.