A growing number of Californians are fleeing the Golden State as the cost of living climbs, and many are coming out ahead financially.
Facing sky-high housing prices and rising everyday expenses, residents are relocating to more affordable areas where the savings can be substantial. On average, movers end up in neighborhoods with monthly housing costs about $672 lower.
After seven years, they are 48% more likely to own a home than those who stay, according to the California Policy Lab’s recent report, “Priced Out: Relocation Amidst California’s Affordability Crisis.”
The study analyzed anonymized credit bureau data tracking migration patterns from 2016 to 2025.
“We expected to see people moving to cheaper locations in other states, but our analysis showed the average costs dropping by nearly $400,000 – that’s a key data point for families who want to become homeowners,” Evan White, executive director of the California Policy Lab, told FOX Business.
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“The likelihood of becoming a homeowner increased by nearly 50% for those who left California. That’s a big difference,” he added.
Even in its less expensive regions, California remains costly compared to much of the country.
Residents pay about 11% more for groceries, 40% more for gas and 61% more for utilities than the national average, according to the report.
“When people leave California, they move to much more affordable locations,” White said. “This suggests that California’s high costs of living factor into their decision to move, or at least their choice of destination.”
While incomes in destination states are often slightly lower, reduced housing and living expenses tend to outweigh those differences, the study notes.
Most relocations are to nearby, lower-cost states rather than across the country.
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Nevada leads as the top destination, followed by Idaho, Oregon and Arizona.
“I was surprised to see that people were most likely to leave California for nearby states, like Nevada and Idaho, and not for Texas and Florida, which gets so much media attention,” White said.
The trend also spans income levels.
A growing share of those leaving come from higher-income areas, though many show signs of financial strain, such as higher debt and lower credit scores compared to their peers.
“What happens to California over the long-term is in the hands of policymakers. Presently, they seem focused on lowering the costs of living, but it takes a long time to ‘turn the ship’ on these issues,” White said.
“But people should temper their expectations about what success means. Costs are unlikely to fall dramatically, but we may be able to slow their growth. California will always be more expensive than other states, simply because it is a more desirable place to live.”
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The migration trend also comes as California lawmakers weigh new taxes targeting the ultra-wealthy, including a proposed 2026 ballot measure that would impose a one-time 5% tax on individuals worth more than $1 billion.
Kevin Brady, former House Ways and Means Committee chairman and an advisor to Americans for Free Markets, previously told FOX Business that steep taxes and heavy regulation are driving businesses and individuals to leave blue states, calling it “the economic story of the decade.”
“I don’t know why California continues to tax its businesses and people just so brutally,” Brady said. “It’s a beautiful state, it is a dynamic state, but they’re chasing out – not just the wealthy and not just businesses – but their young people.”
