Sunbelt Continues to Lead Population Growth

Despite not yet being available at the metro level, the Census Bureau recently released 2022 population data at the state level. The dominance of the Sunbelt region was apparent, and this continued a trend that has been in place since the pre-COVID years. One element of change was a relative cool off in growth for the Mountain West region.

An important methodological note regarding the data is that the annual population totals represent population estimates as of July 1st of each year.

Most Populous States

Population change for the ten most populous states largely followed the trend already in place in previous years. Namely, areas such as California, New York, and Illinois continued to lose population, while states across the South were strong gainers.

The largest decline in this group was in New York, where the population declined by approximately 180,000. California and Illinois also each lost more than 100,000 people from the summer of 2021 to the summer of 2022. California makes an interesting case because the southern portion of the state that is generally included in the Sunbelt region has been a growth area in recent years, but losses in the Los Angeles and San Francisco metro areas have offset that growth. Pennsylvania also found itself moving in the wrong direction with a loss of just over 40,000 people last year. The remaining areas in this group of most populous states were Michigan and Ohio – each lost population in the period but by less than 10,000 people each.

Of these largest states, the big winners in 2022 were Florida and Texas. Florida added around 417,000 people and Texas added about 471,000. The Texas growth allowed it to join California as the only two states with a population above 30 million people. As with those areas that lost population in the last year, Florida and Texas leading the way in growth among the largest states was a continuation of the existing trend.

Georgia and North Carolina were the other two states of the ten largest to see population growth in 2022. Georgia added roughly 125,000 people and North Carolina gained just shy of 135,000.

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Top States – Percent Change

The largest states dominate the list of top population gainers and losers by numeric change, and those were already covered above. Another useful view, though, is percent change. This measure brings into view some smaller areas that experienced more concentrated change one way or the other in 2022.

Florida and Texas, leaders in numeric population growth, also had a great year on a percent change basis. Florida’s 1.9% gain ranked first in the nation for the first time in more than 50 years and the 1.6% increase for Texas ranked fourth. Both were impressive feats given how large the two states are. Idaho, regularly among the leaders in growth percentage, managed second place for 2022 with a 1.8% population gain and South Carolina’s 1.7% growth rounded out the top three.

South Dakota and Montana each achieved a 1.5% gain in population for 2022 with Delaware right behind with a gain of 1.4%. In the Mountain West, Arizona and Utah added 1.3% and 1.2% respectively and the aforementioned North Carolina also cracked the top ten states with a 1.3% increase in the period.

As with the top gainers, the top percent loss states are also familiar from the previous section – New York (-0.9%) and Illinois (-0.8%). Louisiana, West Virginia, and Hawaii rounded out the top five – each seeing population recede by 0.5% or more. California and Pennsylvania, also both already mentioned, each lost 0.3% in population last year to crack this ignominious top ten.

Once again, although some different states are brought into focus when evaluating population change on a percentage basis, the bigger picture trend essentially remained in place from previous years. The Mountain West and the South were well-represented at the top of the growth rankings while California, Illinois, New York, and Pennsylvania appeared near the top of both the largest numeric change losers and the largest percent change losers.

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Takeaways

For the largest states according to population, Southern states such as Florida, Georgia, North Carolina, and Texas continue to be the engine of growth while areas like California, New York, and parts of the Great Lakes region have seen persistent population losses in recent years.

There are certainly different profiles associated with states that have been on the wrong side of the population change trends. For states like California and New York, though population loss is not a positive, densely populated and expensive gateway markets can better absorb losses than areas like West Virginia or the smaller Gulf states.

The extent to which population growth slows between the summer of 2022 and the summer of 2023 will have a profound impact in particular on the multifamily markets that have been at the tip of the spear for growth in recent years. Areas such as Austin, Dallas – Fort Worth, Charlotte, Miami, Orlando, and Tampa have very active construction pipelines partially as a response to the population growth and multifamily absorption that occurred in the years preceding 2022. Substantially lower apartment demand in 2022 has already taken a toll on occupancy in those markets. With expectations for 2023 demand somewhat dour, the incongruity between elevated supply and the new demand environment could create challenges in the near term.

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