The homeless count in America continues to decline.

On a single night in January 2014, 578,424 people were sleeping outside or in an emergency shelter or a transitional housing program. That’s a 2.3% drop from the year before, according to the Homelessness Research Institute at the National Alliance to End Homelessness.

Homelessness decreased among every major subgroup, including unsheltered persons (10%), families (2.7%), chronically homeless individuals (2.5%), and veterans (10.5%), according to the Alliance’s The State of Homelessness in America report.

The drop follows a similar decline in 2013.

“Again, we’ve seen the number of homeless people going down in a context where the funding for the right kind of interventions is getting better,” says Steve Berg, vice president for programs and policy at the Alliance. “The programs that really concentrate on getting homeless people into permanent housing have become more available, and targeted funding is at its highest level in history. We feel there is a connection between the better investments and the right kind of programs, and the fact the recovery continues from the recession is helping, too.”

He’s talking about a range of programs that fit a Housing First model, which focuses on taking a homeless person and getting him or her housed as quickly as possible.

The HEARTH Act, which was passed in 2009, placed a greater emphasis on permanent supportive housing and rapid re-housing, a shift away from transitional housing.

The number of permanent supportive housing beds continued to grow from 2013 to 2014 by 15,984 beds (5.6%) to a total of 300,282 beds, and rapid re-housing capacity nearly doubling from 2012 to 2013 – from about 20,000 to 38,000 beds, according to the Alliance.

Thirty-four states had decreases in overall homelessness. Arizona, North Dakota, South Carolina, and Wyoming—reported decreases in homelessness more than 20%, while other states—Idaho and Nevada—reported substantial increases

The Alliance points out that the decline in homelessness comes at a time when targeted federal funding to address homelessness is at its highest level in history: $4.5 billion in fiscal 2015 for a variety of programs spanning HUD, VA, the U.S. Department of Health and Human Services, and the U.S. Department of Education.

“The Congress and agencies have put more money on the table to do Housing First kinds of programs,” Berg says. “It’s paying off in reduced homelessness, fewer people in shelters, and a lot fewer people on the street. That’s been the result.”

Despite the declining homeless numbers, Berg cautions that many people remain at risk.

“The number of people in poverty (4.8 million) and the poverty rate (15.8%) remained relatively steady,” says the report, noting that 26 states saw an increase in the number of people in poverty.

Approximately 7.7 million people were living with family and friends in 2013, an increase of 67% since 2007.

As the economy continues to recover from the recession and unemployment goes down, rents will start to increase. That becomes a big concern because housing affordability is a driver for increased homelessness.