Have Some Rural Areas Turned the Tide on Population Decline

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According to the most recent county population estimates from the U.S. Census Bureau, almost half of the Fifth District counties in rural areas or small towns (those with a Rural-Urban Continuum Code (RUCC) of 3-9 and henceforth referred to as "rural") experienced population growth between 2020 and 2023. (See here for more on our use of these definitions for urban and rural.) That figure may seem low considering that nearly three-quarters of urban counties saw population growth over the same period. But what's notable about the growth in these rural counties is that more than half of them experienced population declines over the prior decade, from 2010 to 2020.

This reversal in population growth leads to several questions: Why did these counties suddenly experience growth? What turned the tide on longer-term population declines in these rural counties? How are these counties attracting new residents?

We find that net domestic migration was the primary driver of population growth in these counties, and some of the largest gains occurred in small towns or rural counties that are in close proximity to growing metro areas. A combination of factors likely motivated people to move to these areas, including some pandemic-era changes like the increase in hybrid and remote work arrangements, investments in broadband, and individual preferences to live in lower cost or less densely populated areas.

Domestic Migration Drives Rural Population Growth

In total, there were 54 rural counties in the Fifth District that grew in recent years after experiencing a population decline over the prior decade. The census county population estimates data also include information on the components of growth such as natural changes (births and deaths) and net migration (domestic and international). According to these data, 50 of the 54 rural counties experienced a negative natural change, meaning that there were more deaths than births from 2020-2023.

A negative natural change is not uncommon for a rural county. In fact, 91 percent of rural counties in the district saw a negative natural change between 2020 and 2023. This is likely because many rural areas have an outsized share of the population over age 65. (See our Rural-Urban Comparison Maps for more on this.) Because most rural areas have experienced a negative natural change, any total population growth has to come from net migration into the county. And this is precisely what happened.

All of the 54 counties experienced net in-migration, and in most of them, the primary driver was domestic in-migration. On average, domestic in-migration accounted for about 88 percent of total net migration in these counties. In fact, only two counties in the entire Fifth District - Duplin County and Wayne County, North Carolina - had more than half of total net migration come from foreign migration. The map below shows the total increase in population from domestic migration in these rural counties.

Most of the counties with the largest absolute gains were in North Carolina. In fact, eight of the top 10 were near Asheville, North Carolina, in Rutherford County, which saw the largest gain of 2,392 people followed by Nash County (near Raleigh) with a net increase of 1,968 domestic migrants. The only two counties outside of North Carolina in the top 10 were near Florence: Chesterfield County, South Carolina, and near the Chesapeake Bay: Northumberland County, Virginia.

Do These Rural Areas Have Much in Common?

So, how are these rural areas attracting people from other states? Proximity to a metro area seems to matter. The chart below shows that the largest population gains occurred in counties with a RUCC code of 6, followed by 8, and then 4. These counties differ in their urban population share, but they are all directly adjacent to a metro area. In fact, all but 14 percent of the gains were made in rural areas or small towns either in or adjacent to a metro area.

Perhaps rural areas and small towns near metro areas are experiencing growth sprawling out from a city center. Again, Nash County, North Carolina, might be a good example of this. The large population increase in Nash - a RUCC 3 county because it is part of the Rocky Mount metro area - might be a result of its proximity to the Raleigh-Durham metro area, which has experienced strong population growth from domestic migration. Wake and Johnston counties in the Raleigh metro area saw more than 50,000 net domestic in-migrants combined over the last three years.

Another part of the story could be that more flexible work arrangements and greater remote work opportunities allow people to move slightly farther from a metro's center. While these are not observable in the census population data, it seems likely that strong growth in and around Asheville and Raleigh, North Carolina, might be driving population growth in surrounding rural areas. As new commuting pattern data becomes publicly available, it should enable us to observe if this is the case. However, a recent study of proprietary data from Gusto showed that people are choosing to live farther away from where they work. This was particularly true for younger people, those with higher paid jobs, and those who were hired after the onset of the pandemic.

There are other reasons why both metro-adjacent and non-metro-adjacent rural counties have seen their populations start to grow. Affordability is a contributing factor, and to draw on a specific Fifth District example, urban Marylanders have increasingly relocated to lower cost-of-living small towns and rural areas.

To illustrate potential cost savings, we can look at Talbot and Ann Arundel counties in Maryland. Talbot County is on the Eastern Shore of the Chesapeake Bay, across from Anne Arundel County, an urban county that includes the city of Annapolis and is situated between Baltimore and Washington, D.C. The median mortgage payment for someone living in Talbot County is about 14 percent lower than in Anne Arundel County. Median rents in Talbot County are even lower at around $1,200 a month compared to around $1,900 a month in Anne Arundel County. So, the housing cost savings alone can be significantly lower in counties just outside of the metro area.

Counties with amenities often attract residents: Much of the large domestic migration to counties along the Chesapeake Bay, such as Northumberland County, Virginia, is likely because of its attractiveness as a destination for retirees. Meanwhile, the counties around Asheville, North Carolina, such as McDowell and Rutherford, have access to mountain trails, lakes, and state parks, and most places in those counties are less than an hour drive outside of Asheville. So, while these growing rural counties might have some things in common, their unique circumstances could provide other reasons why the population has started to grow.

Closing Thoughts

Over half of the rural counties that experienced population growth in recent years did so after seeing population declines in the prior decade, and that growth came largely from domestic migration. Available data point to several possibilities for this reversal. For example, urban growth might contribute to growth in adjacent counties. In addition, hybrid and remote work arrangements might enable moves to more affordable small towns or rural areas that also have access to broadband and have desirable amenities such as lakes or mountains. Retirements are also increasing, potentially driving population growth in certain areas, which may present some challenges. Time (and new data) will help us understand why we've seen rural population growth increase in recent years and if this is the start of a new trend of rural population growth.

Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.