Thousands of Californians are being priced out of the Golden State and are leaving it for more affordable communities in neighboring states, according to new data from the nonpartisan California Policy Lab (CPL).
Many of those turning their back on the state are doing so because they cannot achieve the life they want, but are seeing their wealthier neighbors doing so, researchers found. By leaving California, they are reaching a dream that has become unattainable to many state residents—becoming homeowners.
Who Is Leaving California, and Why?
While California remains the most populous state in the nation, its boom has long been over. Over the past 25 years, the state has had its slowest rates of population growth ever recorded, the Public Policy Institute of California (PPIC) reported earlier this year.
This is not because California is no longer appealing to newcomers. People are still moving into the state—but people are leaving it at even higher rates.
“For 20 years now, more Californians have left the state than have come to the state,” Evan White, executive director of the CPL at UC Berkeley and co-author of the study, told Newsweek. “That doesn’t mean that California’s population has gone down during that time—but when you look just at domestic migration, there’s been more folks leaving than coming for about two decades.”
From 2010 through 2024, the latest data available, nearly 10 million people moved out of California bound to other states, while just over 7 million people moved to the state from other parts of the country, according to the American Community Survey.
This exodus of residents spiked during the COVID-19 pandemic and it has slowed down more recently, but it has not reversed.
“In 2025, we still lost about 150,000 people to other states,” White said.
California has become more expensive, especially for young people and those who are not already on the property ladder.
The main reason cited by Californians asked about why they are leaving the state is housing, according to PPIC.
While the entire nation is gripped by a housing affordability crisis, few Americans have it as bad as Californians. According to CPL, housing costs for even the least costly communities in the state exceed those of most other places in the country.
Californians also face higher prices for essentials including groceries, gas, and utilities, which are respectively 11 percent, 40 percent, and 61 percent higher than the national average.
“The price tag has gone up on the California Dream, and many families are leaving the state for more affordable places,” said White. “The difference these moves make is stark. Their destination neighborhoods are half as expensive and they end up much more likely to own a home within just a few years.”
It is not only low- and middle-income households who are leaving. The share of movers leaving higher-income neighborhoods has increased by about 6.4 percentage points (from 34 percent to 40 percent) since the pandemic, CPL found.
“Over the past decade, more folks who leave are coming from high-income neighborhoods. There are folks who live from low-income neighborhoods and middle-income neighborhoods, but the proportion that’s leaving from higher-income neighborhoods has gone up,” White said.
When you compare leavers to the neighbors they have left behind in California, they look “financially weaker than their neighbors—they have lower credit scores, they have twice as much student debt, they have lower rates of homeownership and higher credit card utilization,” White explained.
Essentially, White said, they might not be poor—but they struggle to “keep up with the Joneses.” People are “seeking out a lifestyle that they want to live in California, but they can’t seem to afford it, so they’re leaving to find that lifestyle elsewhere.”
The decision to move away somewhere cheaper has, in fact, the power to change their financial trajectory, the study observed.
Where Are Californians Moving To?
On average, Californians moving out of state are relocating to neighborhoods where housing costs—including rent or mortgage, utilities, property taxes, and insurance—are about $672 lower per month.
Rents in their new neighborhoods are about $638 (or roughly 30 percent) lower than what they used to pay in the Golden State, while the median home price is nearly $398,000 (or 48 percent) lower than in the communities they leave behind.
In terms of where exactly they are moving to, they are not going too far from home. Nevada stands out as the largest net recipient of Californians on a per-capita basis, followed by Idaho, Oregon, and Arizona, according to CPL.
What Happens After They Leave?
There is often a downside to moving out of California, especially those who cannot continue working remotely for their Golden State-based jobs: lower wages.
Californians moving to cheaper communities in other states have incomes that are about $339 (or 8 percent) per month lower, on average, than what they used to earn in the Golden State.
But that income difference, CPL researchers found, is far outweighed by the lower costs of living. Seven years after leaving California, former residents are about 48 percent more likely to own a home than similar Californians who stayed in the state, the CPL study found.
While moving out of California might improve the quality of life of those who took the plunge, such an exodus of residents is threatening the state’s future.
California’s population growth is projected to be pretty flat for the next couple of decades based on the California Department of Finance projections, White pointed out.
“As a result, we are probably going to lose some seats in Congress, which some people lament,” he said. “There’s also a possibility of losing tax revenue, particularly if higher income folks are leaving the state, because the state’s tax system relies quite a bit on higher income individuals for the tax pay.”
But there is also a potential upside to an otherwise grim situation. “If more folks are leaving the state and population growth settles down a bit, that would lower demand for housing, which is one of the main cost of living issues in the state,” White said.
“And if we’re able to build some housing and the population does not keep growing, then we might be able to catch up with the two million homes shortage that we have in the state,” he added.
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