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Traditionally, young people have been desperate to leave their small towns and strike out for high-paying jobs in the big city. However, the exorbitant cost of city living has resulted in the opposite now being true. Since the COVID-19 pandemic, younger Americans aged 25 to 44 have been moving to smaller towns in alarming numbers, changing the landscape for real estate investors in the process.

According to Hamilton Lombard, estimates program manager of the Demographics Research Group at the University of Virginia’s Weldon Cooper Center for Public Research, the migration toward rural America has been so great that small towns have been enjoying a revival.

Rural Regions See a Population Spike

Based on population estimates released by the U.S. Census Bureau, the findings show that between 2020 and spring 2024, two-thirds of population growth for those aged 25 to 44 occurred in areas with fewer than 1 million residents or rural counties. 

“Perhaps the most striking statistic within the 2023 age estimates is the fact that since 2020, the country’s small towns and rural areas have been attracting younger adults at the highest rate in nearly a century,” writes Lombard.

Also fascinating is that despite major corporations issuing return-to-office mandates, the migration to small-town America amongst a younger demographic increased in 2023, upending the previous decade’s stats that saw 90% of this growth was concentrated in the largest metro areas with more than 4 million residents.

The loss of residents from smaller towns and cities from the 1990s onward made rural areas economically blighted, with a loss of businesses, communities, and vacant buildings and an unbalanced demographic of largely older residents. Ironically, some of these rural towns and small cities are now seeing residents flood in, making these prime spots for real estate investors to kick-start their wealth-building journey by buying up affordable houses.

Choosing Which Small Town to Move To or Invest In

Being strategic makes sense when choosing which small town to move to, especially if you want to coordinate it with real estate investing. However, even if you don’t plan to invest immediately, small-town living could also be a good idea to help you lower your expenses to save and be better positioned to invest in the future.

Additionally, according to Worth.com, office occupancy and downtown recovery figures look much better in smaller cities than in the biggest markets, a statistic that favors lower living costs in these areas.

Commutable to a Larger City 

Hybrid work has put small towns in play for employees who need to be in larger towns and cities three days a week. According to Lombard’s study, Arlington County, Virginia, across the Potomac River from Washington, D.C., saw its population of young adults grow faster than any other county within the nation’s 20 largest metros during the 2010s. It had six times as many younger residents as those over age 65. However, the pandemic and remote work reversed this in the 2020s, which went against the idea of younger people moving to larger metro areas. 

Natural Beauty for Short-Term Rentals 

According to AirDNA, small cities and rural areas saw a 16% year-over-year increase in listings in 2024, while midsized cities only grew by 10.3%. The short-term rental data website stated,  “These gains reflect an influx of new investment properties entering the market as active vacation rentals.”

The website added that high interest rates and high prices have factored into short-term rental investing.

Realtor and investor John Walker and his wife, Jade, purchased a short-term rental in the small town of Boston, Pennsylvania, on the Great Allegheny Passage, known as the GAP Trail, a popular biking and walking trail, near McKeesport, Pennsylvania, about 20 miles outside of Pittsburgh. He picked it up for just over $50,000 and put around $100,000 into renovations. 

“We’ve had visitors come from everywhere because of the popularity of the GAP trail,” he told BiggerPockets. “The town itself is affordable and easily commutable into the city. Some weekends when it’s not booked, we’ll come here ourselves and ride our bikes. It’s been a great investment.” 

Data Center and Tech Development Plans Spur Investment 

The tech boom has also been a boom for rural America, particularly where data centers to support artificial intelligence (AI) are being built, which require vast expanses of cheap land with access to natural power sources. Demand for construction crews, particularly electricians, is matched only by the demand for accommodation in which to house them.

A New York Times article reveals that four of the largest internet and software companies spent more than $200 billion in capital expenditures last year, mainly on building new data centers. They’re expected to spend just as much or more next year. 

According to Entrepreneur.com, booming tech corridors nationwide are transforming housing sectors. The article says:

“Smaller cities like Abilene, Texas, are experiencing economic revitalization as businesses, housing developments, and local services expand to support AI operations. This increase in job creation means higher demand for housing, commercial spaces, and retail businesses. As AI data centers continue to grow, surrounding communities will need to expand rapidly to accommodate their workforce—creating long-term investment opportunities in both residential and commercial real estate.”

Researching and anticipating tech growth and development throughout the U.S. is a great way to turbocharge your real estate investing career.  Larger developers will buy land and construct housing for long-term employees, but that takes time to coordinate and implement. There’s a gap for smaller investors to buy and renovate existing housing to flip or rent to the scores of workers needed to get data centers and fabs off the ground as the AI boom continues to unfold.

Final Thoughts

While many jobs will remain in big cities, as the New York Times‘ Ezra Klein recently pointed out, big cities like New York City, Los Angeles, and Washington, D.C. are too expensive for middle-class Americans. Compare salaries to the cost of living in these places, and it’s no wonder that there has been a dramatic shift to smaller, more affordable towns and cities. 

Couple this with the technology boom centered around AI and the need for vast swathes of cheap land, and an ideal opportunity has presented itself for savvy real estate investors to capitalize on this generational shift.