New data shows Californians who leave the state are typically saving hundreds of dollars per month on housing.
Many are heading to more affordable regions as costs in California remain extremely high.
This continues the ongoing domestic migration trend driven by housing affordability.
The savings are significant enough to change lifestyles for many families. Saving hundreds a month just by leaving California shows how extreme the cost difference is.
This migration trend is real and it’s one of the clearest signs of how housing costs are driving big life decisions.
According to recent findings from the California Policy Lab and Realtor.com, residents fleeing the state aren’t just looking for a change of scenery, they are successfully “arbitraging” their housing costs to the tune of nearly $700 per month.
Californians have left the state in search of a lower cost of living for decades, migrating to neighboring states that promise cheaper housing and fewer taxes. But a new study quantifies just how much Californians who leave can save in housing costs and even their likelihood of owning a home after they depart.
Those who moved away from the Golden State can expect to save an average of nearly $700 a month in housing costs, according to a new report from the California Policy Lab. Rent is on average about 30% more affordable — around $631 less — and median home prices are nearly $396,000 less.
For those California renters who dream of owning a home one day, people who left were 48% more likely to buy a home after seven years, the study found. Given that buying a home was likely a motivator for at least some exiting the state and that home prices were lower in their new destination, these findings aren’t exactly surprising.
Median home price in destination cities vs. California origin.
Former Californians are 48% more likely to own a home after 7 years.
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Californians are leaving the state for more affordable communities and improving their financial position. On average, movers relocate to neighborhoods where monthly housing costs are $672 less. After seven years, they are 48% (or 11 percentage-points) more likely to own a home.
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People moving out of California increasingly come from higher-income neighborhoods and appear financially weaker than their neighbors. The share of exits from higher-income neighborhoods rose 19% over the last decade. Those who leave have $5,500 more in student debt, on average, and credit scores that were 17 points lower than their neighbors.
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Proximity drives relocation popularity, with Nevada claiming the top spot. Nearby states receive the most Californians per capita. Nevada is the standout, receiving a net 81 Californians per 10,000 residents annually, followed by Idaho, Oregon, and Arizona. Contrary to most headlines, Texas and Florida rank only 11th and 20th, respectively.
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There is still a gap between entrances to California and exits, though it has narrowed since the pandemic. While exits have moderated from their pandemic peak, there are now fewer people moving into the state, a trend that continues to drag on California’s population growth.
Those leaving aren’t necessarily “wealthy” in the traditional sense. The data shows exiters often have twice the student debt ($5,500 more) and significantly higher credit card utilization than the neighbors they leave behind. The move is a survival tactic to escape a debt-to-income trap.