(NewsNation) — The number of homeless people in the U.S. rose to 653,000 last year, increasing 12% to the highest level reported, but even that could be an underestimate.

The data comes from the U.S. Department of Housing and Urban Development’s (HUD) annual Point-in-Time count, which measures the number of sheltered and unsheltered homeless people on a single night in January.

Each year, thousands of volunteers and workers hit the streets to tally the number of homeless people across the country. Those numbers, which are meant to be a snapshot, are then reported to the federal government.

However, advocacy groups like the National Homelessness Law Center have found the PIT count underestimates the full scale of the crisis.

That’s because different jurisdictions use different counting procedures, unsheltered homeless people can be hard to find, and only certain kinds of homelessness fall under the government’s definition.

Here’s what to know about how the U.S. tracks its homeless population.

How does the government track homelessness?

During the last ten days of January, hundreds of local planning bodies with thousands of volunteers and outreach workers hit the streets to find, and count, people experiencing homelessness.

The annual tally is known as the Point-in-Time count, and since 2007, it has provided a one-night snapshot of those living outside or in homeless shelters.

How is homelessness defined?

According to the federal government, a person is experiencing homelessness if they lack a “fixed, regular and adequate nighttime residence.”

Last year, roughly 396,000 homeless people, 60%, were staying in sheltered locations like emergency shelters, transitional housing or safe-haven programs — a 14% increase from the previous year, according to HUD’s report.

Some 256,000, 40%, were unsheltered, which means they were staying in a place not meant for human habitation, like on the street or in a car. That total rose nearly 10% from 2022 to 2023.

Why is it challenging to get an accurate count?

Counting the nation’s homeless population is difficult for several reasons. For one, the annual tally is done in January, meaning seasonal changes in homelessness rates aren’t reflected in the data.

It can also be difficult to find homeless people. They may be living in cars, abandoned buildings or other places in search of privacy, away from those conducting the count.

There are also significant differences in the way local organizations gather the data, leading to inconsistencies across jurisdictions. Many cities rely on volunteers to conduct the count, while others only use hired staff.

A recent ABC News report found the number of counters can vary drastically even in similar-sized areas.

In 2021, the U.S. Government Accountability Office (GAO) released a report recommending that the Department of Housing and Urban Development (HUD) provide local planning bodies with additional tools and information about using administrative data to improve the accuracy of the count.

In February, HUD started taking steps to address the recommendation, according to the GAO.

Who was experiencing homelessness in 2023?

• 186,100 homeless people were part of a family with children, up 16% from 2022
• 35,574 veterans were homeless, up 7% from 2022. The number of unsheltered veterans jumped double that amount, 14%
• Over 34,700 unaccompanied youth, up 15% from 2022. Those individuals are people under the age of 25
• 143,105 people reported chronic patterns of homelessness, the highest number since the data was first reported in 2007
• 137,700 homeless people were age 55 or older

Which states have the most homeless people?

According to the latest HUD report, more than half of all homeless people in the country were in four states: California (28%), New York (16%), Florida (5%) and Washington (4%).

In terms of those who are unsheltered, California accounted for roughly half (49%), with eight times the number of unsheltered people compared to the state with the next highest number, Florida.

When a state’s population is taken into account, the highest rates of homelessness in 2023 were in New York, Vermont, Oregon and California, although Washington, D.C., surpassed all four of those.

From 2022 to 2023, New York (39%), Colorado (39%) and Massachusetts (23%) saw the largest increases in those experiencing homelessness.