California Governor Gavin Newsom’s constituents may not be happy with the rising cost of living in his state. A growing number of Californians are reportedly fleeing the Golden State as the cost of living climbs, and many are coming out ahead financially.
“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.
“The likelihood of becoming a homeowner increased by nearly 50% for those who left California. That’s a big difference,” he added.
As per FOX Business, 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.
READ: $372 for a date night in SF, $125 for roses in Dallas: What Valentine’s Day can cost in America (February 16, 2026)
Rising housing costs and overall living expenses have become a defining feature of life in high-cost regions, particularly in states like California. Over the past decade, rapid increases in home prices, rent, and essential goods such as utilities and groceries have made it increasingly difficult for many residents to maintain their standard of living. These pressures have intensified since the COVID-19 pandemic, as housing demand surged while supply remained constrained.
Research from the California Policy Lab shows that affordability is now one of the primary drivers of migration. Many residents are choosing to leave expensive urban and coastal areas in search of more manageable costs elsewhere. This trend is not limited to lower-income households; increasingly, people from higher-income neighborhoods are also relocating because they struggle to keep up with rising expenses.
The data indicates that those who move often experience meaningful financial relief. On average, movers relocate to areas where housing costs are significantly lower, improving their ability to save money and, in many cases, achieve homeownership. While incomes in these new locations may sometimes be slightly lower, the reduction in living costs generally outweighs the loss in earnings.
“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.”
READ: Affordability, immigration top concerns for AAPI adults: Poll (January 27, 2026)
“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.”
The trend raises important questions about regional inequality and the long-term sustainability of highly expensive housing markets. Places with strong economic and cultural appeal may continue to attract residents, but maintaining accessibility for a wide range of income levels is becoming more difficult. This can gradually reshape community structures, labor markets, and even local economies.
The challenge for policymakers and communities will be finding ways to balance growth with affordability. While migration offers individuals short-term relief, it does not fully resolve underlying structural issues. The broader outcome will depend on how effectively regions adapt to rising costs while still remaining livable and economically inclusive.