Growth has been slowing down in America’s biggest cities in the past decade. New data released by the U.S. Census Bureau confirms this, with 2018 population and housing unit estimates showing that the country’s largest urban centers grew by only a fraction of what they had earlier over the last ten years.
In the first half of the decade, millennials stayed put in cities rather than purchasing homes out in the suburbs, due to the aftermath of the recession that hit later on. This led to noticeable growth in the nation’s biggest cities.
As William Frey, a senior fellow at The Brooking Institution’s Metropolitan Policy Program explained to the Miami Herald, the recession’s aftermath “stranded a lot of millennials in cities rather than their moving off to the suburbs.”
Data from the census shows changes in cities and towns occurring from mid-2017 to mid-2018. Based on the data, it appears that the slowing of city population growth began two years ago and slowed even further last year. According to Frey:
“There is a growing move away from cities. The first part of the decade was an aberration. Cities were growing faster than suburbs. That is starting to turn around.”
Growth Stats for Major Cities
New York City, the most populous city in the U.S. with 8.4 million residents last year, provides a good example of the slower growth trend in larger American urban centers.
Since 2010, New York has increased by 223,000 people, which is the most growth any U.S. city has had over the past eight years (other than Houston). However, most of that expansion took place in the first part of the decade. In 2011 alone, New York grew by more than 82,000 residents, but in comparison, the city saw 39,000 people leave last year.
Dallas, Houston, and Los Angeles have seen their populations increase, but the growth is small compared to what it was six years ago.
The Dallas real estate market seems to be reflecting the slowed population growth with home sales and prices decreasing so far this year. And while Houston has recently seen an increase in sales, when it comes to Los Angeles homes, the numbers show that much like Dallas, the city is also experiencing a decline in sales. This slow growth is indicative in San Jose, California as well with a loss of more than 2,000 residents last year.
Conversely, Phoenix and San Antonio haven’t seen the same diminished growth trend as other cities. It seems that there are plenty of people looking for homes for sale in Phoenix, as the housing market in the city has remained strong despite transactions dipping in other parts of the country. In the San Antonio real estate market property purchases continue to increase, reflecting the city’s steadier population growth.
The Changing Millennial Trend
Many experts are looking at how millennials may be impacting the U.S. housing market through various factors, which may help to explain the slower growth in America’s biggest cities.
Millennials are going about the homeownership process differently than the generations before them did. U.S. Census Bureau data shows that the homeownership rate among people under 35 is the lowest it’s been since 1982.
It seems that the days of moving away from your parents to strike out on your own in the city are a thing of the past. Millennials frequently skip the renting stage, instead opting to live at home with their parents longer while they save for a down payment, later moving straight into homeownership.
With larger budgets that usually include a boost from mom and dad, young people seem to be opting for homes that are located outside of large cities. Older millennials are often looking for larger homes with multiple bedrooms and bathrooms, rather than settling for the traditional “starter home.”
With data showing that buyers are staying in their homes longer, spending more on housing isn’t as much of an issue. It appears that home purchases are being looked at as long-term decisions rather than stepping stones to larger or more expensive properties later on.
Suburban living allows millennials to be closer to their friends and family in the same or similar neighborhoods. And whether they have children or pets, millennial buyers are looking for larger yards as well as nearby greenspaces like parks or conservation areas – things that the suburbs can provide and cities sometimes cannot.
As more young people begin to make the move into homeownership, they seem to be driving a trend towards suburban growth that has seen buyers looking for an alternative to big city living. U.S. cities, in turn, are experiencing slower growth than they had been just a decade ago. But as economic conditions and buyer preferences continue to change, it’s possible that the scales may tip towards cities once again by the end of the next decade.
What about you? Are you looking to move to the city or is the suburban lifestyle more your speed? Tell us in the comments section below and also be sure to browse through homes for sale near you to find out what’s available.
