Priced Out: Californians Hit the Road in Search of a Life They Can Afford

Skyrocketing costs are driving Californians out of the state in search of something increasingly difficult to find at home: affordability. 

A new report by UC Berkeley’s California Policy Lab finds that residents are relocating not because of a lack of opportunities, but because everyday costs have outpaced even relatively high incomes. And for many who move, the tradeoff is worth it.  

An Affordability Squeeze That Keeps Tightening

California remains an outlier on cost. Housing, utilities, and day-to-day living expenses are significantly more expensive than the rest of the country — and that gap is widening: 

• Only 18% of California households can afford a median-priced home, now roughly $869,000. 

• Estimated rent prices are 53% higher than the national average.

• Overall prices sit at 11% above than the country’s average — the largest gap of any state. 

• Everyday essentials cost more too: groceries cost 11% more, gas 40% more, and utilities 61% more than national averages. 

For years, these prices were justified by California's strengths — economic opportunities, cultural influence, natural beauty, world-class universities, and higher wages. But the report’s findings make it clear that higher incomes don't necessarily offset the cost of the affordability crisis. 

What the Data Shows

Using anonymized credit data from 2016 to 2025, researchers followed households before and after they moved. What they found was straightforward: people are leaving in search of a life they can actually afford.

On average, after leaving California:

• Housing costs drop by $672 per month

• Wages decline too by about 8% 

• Individuals are 48% more likely to own a home within seven years

In other words, people are earning less, but getting significantly more out of every dollar. 

Moving Isn’t About Getting Ahead – It’s About Staying Afloat. 

Those leaving California are not primarily from the state’s poorest communities. In fact, exits increasingly come from higher‑income neighborhoods. That suggests relocation isn’t about chasing upside. It’s about managing pressure when housing, utilities and groceries consume too much of a paycheck. 

For lawmakers — in California and across the country — the message is straightforward. When the cost of living outpaces wages, people don’t wait around for relief or try and find a higher-paying job. They move. And once they move, it’s hard to get them back. 

If the goal is to genuinely support workers and families, the focus has to be on outcomes people feel every day. 

Lawmakers need to start prioritizing policies that reform cumbersome permitting processes, boost affordable housing development, and reduce the regulatory burdens and hidden costs baked into everything from energy bills to business licenses that ultimately get passed on to consumers. 

The American Dream isn’t tied to a ZIP code.

It’s tied to whether a paycheck can cover the basics, whether there’s room to save, and whether the future feels within reach. 

The states that will win the next decade won’t simply be the ones with the highest wages on paper — they’ll be the ones that actively pursue policies that make a more affordable life attainable.