Midwest Population Gains Leave Some Rural Towns Behind

Earlier this year, a U.S. Census Bureau press release led to headlines like this one from the Wall Street Journal: “The Midwestern Exodus Is Finally Ending.”

News like this is welcomed in communities that once struggled to hold onto population, but many more-isolated towns still aren’t booming. Even where growth is happening, long-time locals don’t always love the changes those new residents might bring.

South Dakota grew more than 5% between 2020 and 2025 - the fastest rate among Midwest states - with West Coast residents moving into the Black Hills region. Idaho and Montana have seen similar trends over the past few decades.

A South Dakota rancher told David Peters, an  Iowa State University professor of agriculture and rural policy, this story:

David Peters, Professor, Iowa State University: "They had someone move out. And they were on an acreage. And they had a long driveway that connected their home to the county road. They built their home. And winter comes and western South Dakota gets a lot of snow… and they were shocked that the county wasn’t plowing their long driveway."

But ask residents in any town about to close their school due to a lack of students, and the wish for growth remains. 

David Peters, Professor, Iowa State University: "The areas that are losing are essentially the Farm Belt. So any places heavily dependent on agriculture and places not adjacent to metropolitan areas are still hemorrhaging people quite a bit. So the Corn Belt in particular. That would be Illinois, parts of Iowa, parts of southern Minnesota, Nebraska and Kansas. Losing population: out-migration and low birth rates."

Sioux Falls, South Dakota is one of the fastest-growing metro areas in the country. Its fastest-growing suburb, Harrisburg, has nearly doubled its population over the past six years.

Derick Wenck, mayor, Harrisburg, South Dakota: "The population right now is just under 12,000. Six years ago when I was elected in 2020, when I was elected mayor, our population was about 6,300."

The eight miles of fields that once separated  Harrisburg from the metro has shrunk to less than two.

Derick Wenck, mayor, Harrisburg, South Dakota: "Within the next ten years, Sioux Falls and Harrisburg will be shaking hands, across the street."

Wenck himself left a small rural South Dakota town 20 years ago so his family could live in a metro area with more entertainment.

Derick Wenck, Mayor, Harrisburg, South Dakota: "There’s a lot of people that are coming and moving with their jobs to the Sioux Falls area that didn’t want to live in the big city and wanted to live somewhere on the outside… and a lot of it had to do with the school district."

Wenck is happy to see the schools full and thriving, and the corresponding property and sales tax boosts. 

Derick Wenck, Mayor, Harrisburg, South Dakota: "The cons of it is Harrisburg for years didn’t have the sales tax revenue and the tax revenue to keep up with city streets. Well, now we are paying for it in full, and tearing up streets constantly and making them wider."

Jobs are also a key driver, as is distance from family.  

Because of a new job, Johnathan Gallagher and his family are in the process of moving from Sioux Center, Iowa, a town that’s had recent steady growth, to Sioux Falls.

Johnathan Gallagher, Sioux Falls, South Dakota: "I actually had another offer around Des Moines, actually in Ankeny. And family was the reason…Both jobs seemed to be really good and family was the reason to go to Sioux Falls."

Peters says, for many families, it comes down to distance from a city.

David Peters, Professor, Iowa State University: "People are moving to rural communities that are directly adjacent to a metropolitan area. So you can think about it as these communities look like rural places, but most everybody works in a city. They commute in 30 minutes, 45 minutes. …. The cost of living is a little bit lower, there’s better quality of life. But where we see in areas that are very distant from metros, it’s still the sort of what’s been going on for decades in rural America: sort of out-migration of younger people." 

Forty five miles outside of Sioux Falls - right at the outer edge of that commute Peters described - is Pipestone, Minnesota. It peaked at 5,600 people in the 1970s. While the county has held at nearly 10,000 for a century, the city itself shrunk to about 4,200 today.

Dan Delaney, Mayor, Pipestone, Minnesota: "We used to have large farm families and most of the people lived out in the county. Now we have …people living in town…and may have homes with one or two people in it that at one time had maybe a half a dozen people."

To turn the slight dip in population around, Pipestone started offering an incentive: build-ready lots for $15,000, fully refunded if you build a house within two years.

Dan Delaney, Mayor, Pipestone, Minnesota: "And we’ve had some success with that. Last year we had eight new homes built in the city of Pipestone and it doesn’t contribute all to that program but most of them did, and that’s probably eight more than we had in the five years prior to that."

Often those migrating are wealthy retirees leaving California, Oregon and Washington who are willing to pay big-city prices for property with a view near lakes, rivers or mountains in isolated towns.

David Peters, professor, Iowa State University: "It’s sort of a cascade. You have the California, where people are leaving because it’s densely populated, they gain a lot for their homes so they buy a rural property and they can outbid that rural property in Montana, Idaho and Colorado so that kind of displaces people that want to stay in Colorado.”   

And, often, those moving in are buying their second home, with no plan to be there year-round.

David Peters, professor, Iowa State University: "So they’re not spending their money 365 days a year in that community. They are there for the amenities, not for the community. So they kind of isolate themselves. They don’t really care about the town itself.”

Pipestone’s mayor remembers a trend a decade ago where communities were trying to attract retirees who had money to spend.

Dan Delaney, Mayor, Pipestone, Minnesota: "And that’s great. We want to see people retire in our community too, but I think the goal would be to have the young families come back because that way you have a better tax base for everyone."