California’s high costs aren’t deterring Gen Z from moving there: Zillow

A Zillow analysis of U.S. Census Bureau data released Friday shows that the youngest group of prospective homebuyers, Generation Z, are bucking a larger trend by moving to California.

Even as California lost nearly 215,000 residents to net migration in 2022, census data also shows that the Golden State saw a net increase of almost 44,000 Gen Z adults (people born between 1996 and 2004, excluding students) who moved there from other states.

Across all age groups, California led all states for net out-migration in 2022, but it ranked second behind only Texas (77,000) for the highest net in-migration of Gen Z residents.

Zillow pointed out that California is not the only state with a relatively high cost of living that has attracted younger residents even as net migration among other age groups has declined or remained flat.

A cost-of-living index maintained by the Missouri Economic Research and Information Center found that California was the third most expensive state last year (trailing only Hawaii and Massachusetts). Washington, Colorado and Virginia also ranked among the bottom half of states in terms of affordable living, but they joined California among the 10 states with the highest net in-migration among Gen Z.

“Compared to all interstate movers, Gen Z adults who moved to California, Washington,  Colorado or Virginia were more likely to have a four-year college degree, more likely to be serving in the military, and more likely to work in tech,” Edward Berchick, principal population scientist at Zillow, said in a news release.

Zillow also found that 77% of the Gen Z adults who moved to these four states are renters. And each of these states, according to census data, had higher monthly rental housing costs than the U.S. median price of $1,300 — led by California at $1,856 per month.

“Gen Z movers are likely drawn to the job opportunities in these states, despite the higher costs of housing,” Berchick added. “They may also be in a stage of life where they’re willing and able to be flexible in their standards of living while starting their careers.”

Gen Z remains a small slice of the homebuyer market at 4%, according to a 2023 report from the National Association of Realtors (NAR). That share rose from 3% a year earlier. And Gen Z accounts for the largest share of single female homebuyers at 31%, NAR reported.