Fastexy Exchange|Why young people continue to flee big cities even as pandemic has faded

For decades,Fastexy Exchange young Americans formed the lifeblood of the nation’s largest cities.

Now, they’re leaving big metro areas in droves and powering growth in small towns and rural areas.

Since the pandemic, cities with more than 1 million residents have lost adults aged 25 to 44 while towns with smaller populations have gained young people, after accounting for both those moving in and leaving, according to a University of Virginia analysis of U.S. Census Bureau data.

“Younger adults have driven most of the shift towards small towns and rural areas since the pandemic,” said Hamilton Lombard, the study's author and a demographer at the University of Virginia’s Weldon Cooper Center for Public Service.

It’s no surprise that the health crisis fueled a migration of many Americans young and old to less populated areas with lower risk of contagion. But even as fears around COVID-19 have eased significantly, the endurance of the remote work shift sparked by the crisis and lower costs in smaller metro areas have continued to encourage young Americans to move to rural communities, Lombard said.

“The migration of younger adults into small towns and rural areas picked up last year rather than returning to pre-pandemic trends,” he said.

The trend, if it persists, could further dampen the vibrancy of large cities already diminished by the COVID-19 crisis while enhancing the economic viability of small towns.

When did people start moving to big cities?

After declining in the 1960s and 1970s, large cities were rejuvenated in the 1980s and 1990s by the tendency of white-collar industries to cluster there to benefit from better communication and networking and by young professionals attracted to both the jobs and social and cultural amenities.

Since 1980, 80% of the growth of the nation’s under-45 population has occurred in metro areas with more than 1 million residents, according to Lombard's study. Meanwhile, in small towns, that age group is smaller in size today than it was in 1980.

Although young Americans’ preference for large cities continued for decades, by around 2017 rural areas began drawing more people aged 25 to 44 and large metro areas started losing them as urban costs spiraled higher and many millennials entering their 30s started families and bought larger homes. Still, Lombard said, with a declining birth rate constraining the supply of young workers even as millions of baby boomers retire, heading into the 2020s large cities were poised to attract the bulk of young employees with higher wages and lots of amenities.

How has the pandemic affected cities?

The pandemic turned that dynamic on its head. Since 2020, two-thirds of the growth of the 25-44 age group has occurred in metro areas with fewer than a million residents or rural regions. From 2010 to 2020, 90% of that cohort’s population gains were in the largest metro areas with more than 4 million residents, according to the study.

It’s not just young people fueling a movement to small-town America. Counties in metro areas with populations of at least 1 million lost 750,000 residents of all ages in 2021, 650,000 in 2022 and 550,000 in 2023, according to a Goldman Sachs analysis of Census Bureau figures in May.

But as the health crisis eased, Lombard figured young Americans would return to their role of helping revive big cities.

Instead, the migration of young adults to small towns unexpectedly accelerated last year. From 2020 to 2023, young people comprised 54% of population gains in areas with fewer than 250,000 residents while Americans aged 65 and older made up the remainder, the report said.

In recent decades, by contrast, population growth in small towns and rural counties came almost entirely from older adults, Lombard said.

Although more Americans in their late 30s and early 40s leave large metro areas to buy large houses in more affordable markets, limiting the study to those aged 25 to 34 doesn’t change the trend line, Lombard said. Since 2020, areas with fewer than 1 million residents have added 25- to 34-year-olds in large numbers while more densely populated areas have lost them.

Where is Gen Z moving in 2024?

One age group that has returned to the nation’s largest cities is 18- to 24-year-olds, a segment of Generation Z (age 17-27), with more now moving in than leaving, said Adam Kamins, a regional economist for Moody’s Analytics. That group remains attracted “to the lifestyle and amenities associated with big cities,” Kamins said.

Lombard, however, said it's the presence of more colleges and higher college enrollments in big cities that explains why their population of 18- to 24-year-olds is growing again.

How does remote work affect cities?

Those in the 25 to 44 age bracket may not come back to large metro areas anytime soon.

Lombard cited a remote work trend that has abated as more companies force employees back to the office at least part time but shows no sign of petering out. The share of U.S. employees working from home at least some of the time has stabilized at 20% to 25%, Goldman Sachs said in its report. That has allowed more young Americans to live in smaller towns with more open spaces, natural beauty and low costs.

As large-city home prices and rents have soared, young people have flocked to smaller, more affordable markets. The average wage in San Francisco is $46 an hour, compared to $20 in Jefferson, Georgia (pop. 13,233), according to job site ZipRecruiter.

But for many young people, Lombard said, the higher pay doesn’t offset the heftier costs. The average price of a home in San Francisco is $1.3 million, compared to $410,900 in Jefferson, according to Zillow. From 2020 to 2023, the population of 25- to 44-year-olds shrank 7% in San Francisco while rising 19% in Jefferson, the report said.

Meanwhile, persistent labor shortages are likely to continue to force employers to allow remote work and push up wages sharply even in smaller communities, boosting their fortunes while challenging larger cities.

“It will likely significantly change the dynamism of downtowns of some large cities,” Lombard said. He added that such metro areas can cope in part by adding long-distance commuter trains and more regional flight options to bring residents who live beyond the reaches of the metro area into the city.