The average American now finds themselves living next to strangers. Around 25% of adults age 18 to 29 say they talk with their neighbors at least a few times a week, according to a survey released earlier this month by the American Enterprise Institute, down from 59% in 2012. That has implications for the country’s declining social engagement and rising rates of loneliness, but there’s an economic cost to losing neighborhood ties, too.

Americans who lack a collaborative community environment or reliable neighbors—defined as people they would turn to in times of hardship—are less likely to be doing well financially and less confident of their ability to navigate economic circumstances, according to a Gallup poll released Tuesday. Loss of social connections effectively leads to a negative compounding effect for Americans who are already struggling financially, a particularly distressing trend for low-income households and young people.

The Gallup poll primarily attributes the harmful effects of declining community to a widespread loss of personal agency. Across age and income levels, Americans who do not consider their neighbors reliable are 16 to 22 percentage points less likely to feel as if they are in control of their own financial future. Strong community ties were also associated with more affordable housing and better job prospects.

“The type of community people reside in may also contribute to how much control they believe they have over their lives, independent of their individual circumstances,” Gallup wrote of the poll’s findings. “Strengthening the social and economic fabric of local communities may be as important as addressing individual-level barriers.”

America’s community loss

Repairing the country’s fraying social ties will be a challenge. One in three Americans say they do not rely on people in their community, and nearly half say their neighbors do not work together to solve shared problems or look out for one another, the Gallup poll found.

America may not have transformed overnight into a distrusting place full of unfriendly strangers, though to many people it might feel that way. The American Enterprise Institute report attributed Americans’ declining propensity for neighborly chit-chat to people spending more time at home and indoors, and less time outside or in public gathering spaces. 

The rise in remote work may have also played a role.  Despite many Americans having more time on their hands to reach out to people living a few feet away, few appear to have taken the opportunity. Around one-quarter of remote workers said their social skills had declined since setting up a home office, according to a 2024 ResumeBuilder survey.

Another factor is the declining availability of publicly available third places such as parks, coffee shops, bars, or community centers—anywhere people can gather that isn’t their home or their workplace. In recent years, Americans—particularly young ones—have been decamping from these spaces in greater numbers, a trend that pre-dated pandemic-induced shut-ins. 

Digital isolation likely isn’t the only reason for the decline of third places’ appeal. The Urban Institute detailed in 2024 how declining government funding for public spaces had left many dilapidated and underutilized, or privatized and no longer free. Affordability is also a concern for younger Americans:  A growing number of them cite rising costs as reason to spend less time socializing outside their homes.

The business case for social ties

It’s added up to plummeting trust and friendliness in communities that used to drive local economies and individual ambition. A specific area’s social capital—the collective value of local trust and relationships—has been associated with better academic performance and fewer cases of violence and crime. 

High social capital might also be associated with better business outcomes. A 2022 study of small businesses that took on federal relief loans during the pandemic found one of the clearest predictors of a business’ success was whether social capital in the local community was high. The authors observed factors including community pride and participation rates in local associations and religious services, finding good social capital represented an “essential component” to small business formation and growth.

In many parts of the U.S., that level of trust and pride in local communities seems to be eroding. More than half of respondents to the Gallup survey said they did not trust their local leaders to act in the local population’s best interests, and nearly 70% said they did not feel confident their ideas to improve the community would be listened to, whether it be a new space for weekly gathering or a business idea.

The Gallup poll did have some reassuring news: 72% of adults consider their community something worth investing in, and motivation to contribute to one’s community rises fast once trust in leadership is restored. 

Though many Americans might feel isolated from their neighbors in the digital age, it doesn’t necessarily mean they want to be.