Californians fleeing to red states are driving up home prices and rents in their new cities, data shows

California Exodus Fuels Housing Inflation in Hot‑Spot Cities Nationwide

A growing wave of Californians leaving the state is sending ripples through the housing markets of cities across the country, according to a new analysis by the Los Angeles Times and data from the Council for Community & Economic Research (C2ER). While the destinations remain cheaper than Los Angeles overall, the rapid rise in rental and home prices there is tightening affordability for residents and new arrivals alike.

Where the Migration Is Going

The Los Angeles Times’ May 31 study catalogued the top ten cities that have drawn the most former Los Angeles and California residents over the past year. The list is a mix of traditionally Republican‑leaning cities—Nashville, Dallas, Austin, Houston, Phoenix and Atlanta—as well as blue‑leaning urban centers such as Portland, Seattle, Las Vegas and Denver. Each of the ten has seen median rent and home‑price growth outpace that of Los Angeles between 2020 and 2025, according to C2ER’s cost‑of‑living index.

“People are heading to places that are dramatically less expensive,” said Evan White, co‑founder of the California Policy Lab, in a comment to the Times. “But the affordability gap is beginning to shrink.”

Homeownership and Price Appreciation

White’s research also found that Californians who relocate tend to purchase homes in their new cities at a higher rate than the national average. This trend is reinforced by the fact that houses in the most popular relocation spots are appreciating faster than those in California. The result, White explained, is that selling a Californian home to move elsewhere is becoming less profitable over time, nudging more movers toward buying rather than renting.

Zillow’s data add nuance to the picture. While Phoenix and Nashville saw median home‑price increases of about 70 percent—roughly twice that of Los Angeles’s 45 percent—only six of the ten cities surpassed LA’s home‑price climb. Rental increases were less stark, with only five cities outpacing Los Angeles’s 29 percent rise in median rent.

Regardless of the differing growth rates, all ten destinations remain cheaper than Los Angeles on a per‑square‑foot basis, but the pace of price escalation is narrowing that advantage.

The Local Response

City planners in some of the most affected metros are taking the influx seriously. In Austin, architect Chris Gannon told the Times that the city is “trying to balance the population boom from incoming Californians with rising home costs for in‑state residents.” “If there’s less Californians coming,” Gannon said, “that’s probably better for the folks here because that means less competition.” His comments echo concerns across the country that a sudden surge in demand could outstrip supply and drive up costs for long‑time residents.

California’s Continuing Exodus

Los Angeles County alone lost more than 54,000 residents between 2024 and 2025, a figure that underscores the scale of the migration. Beyond the county, California’s overall population decline has been propelled by a mix of economic factors, including high taxes and the looming billionaire wealth tax. Many working‑class families and affluent business owners are moving to states with lower cost of living and more favorable tax climates.

The trend is not merely a footnote; it’s reshaping housing markets in cities that were already grappling with affordability. As new Californians pour in, the demand for both rental and ownership options is increasing, which in turn feeds back into price growth.

Looking Ahead

While the exodus continues, the long‑term effects on the housing market remain to be seen. Will the influx of new residents ultimately stabilize or exacerbate affordability challenges in these cities? For now, city officials, planners, and developers are watching closely, looking for ways to manage growth without compromising the quality of life for existing residents.

The California Policy Lab and other think tanks are monitoring the trend, hoping to provide policymakers with data that can guide zoning, transportation, and housing strategies. As the numbers unfold, one thing is clear: California’s population shift is not just a story of people leaving; it’s a story of how the housing landscape is changing across the United States.