Gen Z Fled California in Record Numbers as AI Boom Lured Others
Texas and Southeastern states absorbed tens of thousands of young workers fleeing West Coast rents.
California lost 58,109 Gen Z adults in 2024, the steepest net outflow of young workers for any U.S. state, according to a LendingTree analysis of Census data. Texas absorbed the largest share of those departing residents.
The exodus hit while nearly 11 million Americans born between 1997 and 2012 changed addresses last year — roughly one in four. But the destinations tell a story about money, not scenery. South Carolina added 22,843 young adults. Missouri gained 14,063. Tennessee picked up 13,537. These are states where median rent sits hundreds of dollars below coastal averages.
Washington, D.C., broke the pattern. The capital pulled in 13,905 Gen Z adults despite its punishing housing costs, buoyed by federal contracting and lobbying payrolls that offer entry-level salaries rarely found elsewhere.
Forty-two percent of this generation lives paycheck-to-paycheck, a Bank of America study found. Student loan repayment resumed in late 2023 after a three-year pandemic pause, immediately tightening budgets for millions of borrowers who had delayed saving or relocating.
“When you’re young, and you’re just getting started, you don’t have to worry about moving your kids to a new school or uprooting your entire family,” Matt Schulz, the report’s author, told Realtor.com.
Yet California isn’t emptying out entirely. U-Haul’s 2026 Midyear Migration Trends report, which tracks one-way truck and trailer rentals from July 2025 through June 2026, placed the state in the top three destinations for both Gen Z and Millennial movers. The San Francisco Bay Area specifically ranked among the generations’ top metro destinations.
The artificial intelligence sector is pulling bodies back toward the coast. Anthropic and OpenAI maintain major operations there, alongside 56 Fortune 500 companies ranging from Apple to Williams-Sonoma. For software engineers and adjacent roles, the wage premium still covers the rent.
That math only works for a fraction of arrivals. California has ranked dead last in U-Haul’s annual growth rankings for six consecutive years. The state draws highly paid specialists while hemorrhaging service workers, teachers, and recent graduates who cannot clear $3,000 monthly rent thresholds.
Where young workers should actually go remains contested. NYU Stern School of Business professor Scott Galloway argues for dense urban centers, claiming on The Diary of a CEO podcast in 2024 that two-thirds of global economic growth over the next 30 years will concentrate in 20 “supercities” like London, Milan, New York, and San Francisco.
Real estate investor Barbara Corcoran offers the inverse strategy. Speaking on the Elvis Duran radio show in 2023, she advised buyers to target overlooked Southern markets with poor school districts and depressed property values.
“Go anywhere in the South other than the hot spot,” Corcoran said. “There’s always a cheap house to buy, always. But not Florida, forget about Florida.”
