As of the census of 2000, there were 3,094 people, 695 households, and 658 families residing in the town. The population density was 1,573.3 inhabitants per square mile. There were 721 housing units at an average density of 366.6 per square mile. The racial makeup of the town was 97.09% White, 0.10% African American, 0.29% Native American, 0.52% Asian, 0.19% Pacific Islander, 0.52% from other races, and 1.29% from two or more races. Hispanic or Latino of any race were 1.94% of the population. There were 695 households out of which 76.8% had children under the age of 18 living with them, 89.1% were married couples living together, 4.3% had a female householder with no husband present, and 5.3% were non-families. 4.9% of all households were made up of individuals and 1.4% had someone living alone who was 65 years of age or older. The average household size was 4.44 and the average family size was 4.58. Cedar Hills has a large number of children, with 49.0% of the population under the age of 18, 7.2% from 18 to 24, 30.4% from 25 to 44, 10.4% from 45 to 64, and 3.0% who were 65 years of age or older. The median age was 18 years. For every 100 females, there were 101.4 males. For every 100 females age 18 and over, there were 96.6 males. The median income for a household in the town was $62,688, and the median income for a family was $63,625. Males had a median income of $52,813 versus $32,708 for females. The per capita income for the town was $16,319. About 3.8% of families and 4.5% of the population were below the poverty line, including 5.1% of those under age 18 and 5.7% of those age 65 or over.
The city’s current business license ordinance indicates the requirements and any restrictions in operating a home occupation business, as well as other types of businesses.
As the bedroom community grew and the prospect of businesses locating in Cedar Hills loomed, there was a dispute as to whether stores should be allowed to open on Sunday, and whether alcohol should be allowed to be sold. This was due to a large majority of the city's residents being members of The Church of Jesus Christ of Latter-day Saints, but it was resolved in a 2005 when a referendum vote on two initiatives were defeated. The anchor business for the commercial center, Walmart, opened in 2009 and remains open on Sundays and sells beer.
