California’s long-standing reputation as a center of opportunity and economic mobility is facing growing pressure as more residents leave the state and fewer people move in.
A new report from the Public Policy Institute of California (PPIC) says the state is experiencing its slowest population growth on record, with domestic migration playing a major role. California has recorded a net loss of residents to other US states since 2001.
Housing affordability has emerged as one of the strongest factors behind the trend. Despite years of efforts by state lawmakers and Gov. Gavin Newsom to increase housing supply and make homes more affordable, construction has remained well below the levels needed to meet demand.
Between 2010 and 2024, almost 10 million people left California, while roughly 7 million moved into the state from elsewhere in the US. The pattern accelerated during the pandemic, but recent figures indicate that the impact is increasingly concentrated among lower- and middle-income residents.
Lower-Income Californians Are Leaving in Larger Numbers
The migration data challenges the common perception that California’s population decline is mainly being driven by wealthy professionals and technology workers.
Since 2014, California has lost more than 500,000 lower-income adults, equivalent to around 10% of that population. The state has also experienced a loss of more than 8% of residents without college degrees.
The PPIC findings suggest affordability and economic security are major considerations for many of those leaving, rather than simply a desire for a different lifestyle.
Higher-income residents have also moved out, but their overall population loss has been considerably smaller. California recorded a net loss of about 165,000 higher-income adults and roughly 75,000 college graduates over the past decade. Those figures represent less than 2% and 1% of their respective populations.
Remote work has nevertheless made relocation easier for higher earners. Their migration rates rose sharply during the pandemic and, although they have declined by 28% from the 2021 peak, they remain above pre-pandemic levels.
That creates a longer-term concern for California policymakers because remote workers can increasingly maintain their jobs without remaining in high-cost areas.
Housing Costs Remain a Major Driver
The PPIC report points to housing expenses as a leading reason people give for leaving California.
Since 2015, nearly 900,000 residents have identified high housing costs as their main reason for moving away, representing a significant increase compared with previous decades.
When Newsom became governor in 2019, he made housing a central policy priority and set a target of building 3.5 million homes by 2025. Reaching that goal would have required construction of approximately 500,000 homes each year.
California has fallen far short of that pace. The state is currently building fewer than 110,000 homes annually, while permitting has weakened in recent years amid higher interest rates, construction expenses and regulatory challenges.
The Legislature has also attempted to remove some barriers to development. A major reform of the California Environmental Quality Act (CEQA) was passed last year to streamline environmental reviews for certain infill housing projects and reduce delays associated with litigation.
However, housing experts have argued that additional changes will be needed to address zoning restrictions, local resistance and the high cost of labor and building materials.
Californians Find Cheaper Housing Elsewhere
The price difference between California and other states remains substantial.
California’s median home price is around $830,000, compared with approximately $360,000 in Texas, $445,000 in Arizona, $460,000 in Nevada and $475,000 in Idaho.
Idaho is among the states that have attracted Californians seeking lower housing costs.
The PPIC report found that roughly half of Californians who move to another state are able to purchase a home in their new location. By comparison, only about one-third of people moving into California can afford to buy a home.
Political views also appear to influence some residents’ decisions. Conservatives are more likely than liberals to say they have considered leaving California. However, the PPIC findings indicate that political identity is generally secondary to economic concerns such as housing affordability.
Economic Insecurity Adds to the Pressure
The population figures come shortly after another PPIC report examined economic insecurity across California.
That study found that middle-wage employment has recorded no net growth since 2000, while nearly one-third of households do not have enough liquid savings to cover basic expenses for even a month if their income suddenly disappears.
The combination of expensive housing, limited savings and uneven wage growth is adding to concerns about whether California can continue offering the economic mobility that has long been associated with the state.
According to the latest findings, only three in 10 Californians still say they believe in the American Dream, highlighting the broader economic pressures shaping how residents view their future in the state.
