The pandemic-era exodus of Californians to other states has eased, but the sometimes shocking cost of living continues to press thousands of residents to leave for less expensive locations, according to a new study by UC Berkeley's California Policy Lab.
Residents who leave - often for neighboring states such as Oregon, Nevada and Arizona, or further destinations such as Texas and Florida - can find housing costs that are nearly half of what they would pay in California, the report found. And, it says, that disparity also appears to be discouraging residents of other states from moving to California.
In all, California in 2025 experienced a net loss of about 150,000 people. That's less than 1% of its 39 million residents, but if that's the "new normal," the report says, the implications "could be severe." Fewer people could mean a smaller tax base to build roads, fight fires and ensure public safety. California is also expected to lose clout in Congress as several of its congressional seats will be reallocated to states where the population is growing.
"There are tremendous problems with affordability in the state," said Evan White, executive director of the California Policy Lab. "We find that is probably impacting people's relocation decisions. … What we show for the first time is that people who leave are, in fact, improving their financial positions, and are able to own homes in greater numbers after the move."
The report - "Priced Out: Relocation Amidst California's Affordability Crisis" - was co-authored by White and Policy Lab researcher Brett Fischer. It was released Tuesday, March 31.
The report is based on anonymous, individual-level data drawn from a national credit bureau to observe where Californians moved between 2016 and 2025. The data also allowed Berkeley researchers to assess indicators of the movers' financial well-being before and after their moves.
Through this innovative approach, the report presents a detailed look at the economic dynamics that many Californians feel every day and that are driving some to pull up stakes and leave for a new state. While the California Dream remains alive and strong - despite reports in some quarters of the news media - White suggested that elected officials and policymakers clearly have challenges to solve.
Births, deaths - and housing costs
The population of the Golden State increased consistently over about 60 years starting in the mid-20th century. Today, one in nine Americans live in California. Its population is larger than the least-populous 22 states combined. If it were a country, California would have the world's fourth-biggest economy.
What we show for the first time is that people who leave are, in fact, improving their financial positions, and are able to own homes in greater numbers after the move.
Evan White, director, California Policy Lab
Over the last two decades, however, births have fallen, deaths have risen and fewer immigrants have come from foreign countries. During the COVID-19 pandemic, exits rose and California lost many more residents to other states, while migration from elsewhere in the U.S. plunged.
While the number of exits has nearly returned to pre-pandemic levels, the new report found, economic dynamics put California in a class almost by itself, with housing costs even for the least expensive California communities higher than most other areas in the U.S. The report cites other data showing that groceries are 11% more expensive here, gas is 40% more expensive and utilities are 61% more expensive.
According to the report, those high costs are exerting a powerful influence on California migration:
- Among those who moved out-of-state, monthly housing costs in their new neighborhoods averaged $1,706 - about $670 less than the average $2,376 cost in their former California neighborhoods. Among those who moved into California, average monthly housing expenses in their new neighborhoods jumped to $2,418, up 38% from the average housing costs in their old neighborhoods.
- After seven years in their new states, former Californians are 48% more likely to own a home. Citing another study, the California Policy Lab reports that in 2012, "the state's median household income was roughly sufficient to qualify for a mortgage on a mid-tier home, but it now falls substantially short of the level needed to qualify for even a bottom-tier home."
- While incomes in their new out-of-state neighborhoods are about 8% lower on average, the report says, the "difference is far outweighed by the lower costs of living." At least some of the movers are able to maintain their California incomes as they work remotely.
- Perhaps surprisingly, people who are leaving California increasingly come from higher-income neighborhoods, while the share of those from lower-income neighborhoods has declined.
- In raw numbers, Texas is the most popular relocation destination, followed by Arizona, Washington and Nevada. But White says per capita measures better reflect migration popularity. On that basis, Nevada is the leader: 226 Californians per 10,000 residents moved to the state each year between 2016 and 2025; 146 Nevadans per 10,000 relocated to California.
A reflection of economic anxiety?
White acknowledged that other factors could be driving the migration patterns. Parts of California are regularly devastated by wildfires and storms, and there's the constant risk of earthquakes and drought. Some people are turned off by the state's visible homeless population or because California is dominated by Democrats and liberal political interests.
But what emerges from the 21-page report is a sense that economic insecurity is pervasive among Californians. Moving to a new state is expensive, White said, and the decision to leave is sometimes "a move of last resort" borne out of economic anxiety.
White pointed to the economic stress imposed by Proposition 13, the 1978 measure that limited property tax increases. Because the law allows homes to be revalued - and property taxes to be raised - only after a home is sold, new homebuyers are in effect penalized.
"New homeowners are paying really high property taxes," White explained, "whereas folks who have owned their home for 20 or 30 years are paying very low property taxes. With two neighbors, the person who's lived in their home for a short time might be paying 10 or sometimes 20 times what their neighbor is paying.
"You've got a lot of people in the state who are living paycheck to paycheck or really struggling to meet the cost of living. That is a much bigger problem, and one that California should attend to."
White credited California lawmakers with recognizing the severity of the state's housing problem and, in recent years, increasing their focus on policy solutions. But recent policy hasn't solved the problem yet, he said.
Myth or fact: The California Dream is fading
At the same time, he argued, partisan media have fabricated a myth that California is a failed state, a victim of its own progressive values. Such accounts, he said, are misleading.
The California Dream is still very much alive.
Evan White
"I don't think it's fair to say that the California Dream is dying or withering - that's an overstatement," he said.
White said that people in other parts of the country frequently ask him if California is still livable. He tells them that crime rates are down considerably in recent decades, despite a small bump after the pandemic. The state remains a global center for business and technology, entertainment and agriculture. And it has some of the world's greatest national parks and wilderness areas.
"California continues to mint more millionaires every day," he said. "The business environment is such that for every millionaire we lose, we're minting new ones - there's pretty good evidence of that. The California Dream is still very much alive."
