California To Texas Migration Intensifies As Movers Seek To Reap The Benefits Of A Friendlier Housing Market

Key takeaways:

• California to Texas is the most popular interstate relocation route in the U.S., only challenged by New York to Florida, with 93K people making the move
• 2021 was a record-breaking year in terms of California to Texas move-ins, with roughly 111,000 people taking the route
• In 2021, about 1 in 2 people who migrated from CA to TX were millennials
• Santa Clara to Dallas County brings in the most savings if you want to buy a home, with a 258% difference in listing prices ($410,000 vs. $1,467,000)

Not only is California to Texas migration not slowing down but the route is also getting more crowded. Overall, 111K people – or 300 people a day – exchanged the sunny Californian skies for Texan ones in 2021, the peak period of the last decade and a whopping 80% increase compared to 2012 figures. This route is obviously not a one-way street, but Texans tend to move to California in much smaller numbers. A total of 33K Californians moved to Texas in 2021.

The reasons behind people moving from California to Texas move are undoubtedly varied but affordability and job options are major incentives that support the decision to swap one state for another. Among the things that help lure people to Texas are the no-income tax policy, the lower cost of living and the robust employment opportunities significantly bolstered by the tech and energy sectors. The remote work trend is further fueling the movement as many people who are no longer tied down to an office can easily choose friendlier housing markets, sometimes without letting go of their considerable Californian paychecks. In addition to lower housing costs, transplants also get somewhat larger living spaces, with single family homes in Texas being 17% bigger than Californian residences. Utilities are generally lower-priced in Texas as well, roughly 20% less than in California.

On the business front, Texas has actively pursued an economic strategy that includes creating a business-friendly environment that helped not only to retain businesses but also attract new ones – including some high-profile movers such as Elon Musk and Joe Rogan, who relocated some of their activities here. As it turns out, over 100 companies moved their headquarters to Texas since 2020, with 40% of them coming from California.

Who’s moving to Texas? Millennials with above-average incomes drive California to Texas migration

Most people moving from California to Texas are millennials, making up 46% of those decamping to Texas. Gen Xers are also jumping on the bandwagon with 21% of those who moved to Texas being 40- to 55-year-olds. Baby boomers and Gen Zers are also joining in but in much smaller numbers.

The millennials who moved to Texas come with a household income of $114K per year, 21% more than what millennials bring home overall at a national level ($94K/year).

Based on our research, most Californian millennials are headed to counties anchored by Austin, Houston and Dallas. Tech, finance, education and health care are some of the fields that most appeal to this age cohort. In Austin, for example, the tech scene is particularly booming, as Dell, Google, Apple, Oracle and other big players compete to attract top talent.

Housing perks in the top 25 moving destinations from Texas to California: LA County to Collin County gets movers 62% bigger houses whereas homebuying savings may reach $1M when choosing Dallas over San Jose

Californians have been moving to Texas in droves for over a decade now. But, naturally, not all locations have the same appeal, especially since California is not an easy-to-let-go state. To find out which Texas hotspots are being eyed by Californians and what they put on the table for newcomers, we’ve turned to research data. We dug deep into the latest county-to-county migration information from the IPUMS (2021) and identified the most common relocation routes from California to Texas. Since the housing market can be a deal breaker for any kind of moving decision, we’ve looked at home listings prices on Point2 and apartment rents in Yardi Matrix to see what's in store for both homeowners and renters in terms of cost of housing and living space.

Benefitting from historically friendly fundamentals, Texas offers cheaper housing options than California. But for how long remains to be seen, as the massive demand that put an extra strain on the market, particularly on in-demand locations, caused substantial price increases. In fact, based on Zillow data, the median home value in Texas has increased 54% in the last five years, whereas California’s median home values went up by 42% during the same period.

However, overall, Texas still stands out as a great destination for those who seek a more relaxed housing landscape all while benefitting from a sound job market in an amenity-laden environment. And for some of those taking the route from CA to TX, the perks they can amount to amazing financial savings as well as more living space at home.

Enjoy it while it lasts: Californians following two moving routes can save over $1M when buying a home in Texas

Moving to Texas from California spells good news if you’re contemplating becoming a homeowner in the Lone Star State and can say goodbye to Golden State prices. Homes cost, on average, about $282K less here compared to California, amounting to a 70% price-tag difference.

Zooming in on county-to-county migration patterns, two moving routes can result in savings of over $1M. Buying a home in the Dallas area as opposed to one in San Jose can result in savings of over $1M, on average, as the home price difference between Santa Clara and Dallas counties is a whopping 258%.

The second biggest difference in listing prices is between San Mateo and Travis counties, at 243%, giving homebuyers a chance of nearly $1.3M on average in savings.

Moving from Santa Clara County to Williamson or Travis counties also proves to be financially advantageous for prospective homebuyers, generating potential savings of over $900K.

Most Californians can save over $1,000 in rent when moving to TX

Renters can easily afford to live in the 25 most popular TX destinations without shelling out more than 25% on rent, except for the San Diego to Dallas counties moving route. Moreover, in 18 of the moving routes, they can save over $1,000 a month in Texas as compared to in their Californian county of origin. Not only that, but they can also make hefty savings if they switch renting from one state to the other. Except for the Los Angeles County to Collin County route, renters pay over 50% more in California versus their Texas destinations.

 

The Los Angeles County to El Paso County move yields the highest savings as the difference in rents sits at 154%. Renters can pocket close to $1,580 a month if they make the switch. The second-best savings go to those moving from the San Diego area to San Antonio, with a 110% difference in rental rates, a saving of roughly $1,470 on rent per month.

Moving to the San Antonio area also pays off for Angelenos, as they could pay up to $1,400 less per month on their rent, a 104% reduction in costs.

Need more space? A move from Los Angeles County to Collin County generates the biggest gain in living space, an extra 1,055 sq. ft. for homeowners and 124 sq. ft. for renters

Interestingly enough, homes in the Lone Star State are not holding particularly strong to the old adage of “everything is bigger in Texas.” We compared the square footage of Californian homes and apartments to their corresponding Texas ones, and while there is a tendency for Texas abodes to be bigger, the differences are not overwhelming.

On average, homeowners get to enjoy 17% bigger homes in Texas versus California whereas apartments are barely 6% larger. 

But Texas can help movers maximize living space as the state fares considerably better on the self storage front, with over 10.3 sq. ft. of storage space per person. California, on the other hand, is lagging behind with 6.3 sq. ft. of storage space per capita. Mirroring apartment rental trends, street rates are also cheaper in Texas for self storage units. A standard storage unit in Austin, TX rents for $120 per month whereas $259 a month is called for in the Los Angeles self storage market, the fifth-most expensive in the country.

Overall, for those prioritizing living space at home, a move from Los Angeles County to Collin County would be the most rewarding. This route brings the most space gains for both homebuyers (1,055 sq. ft.) and apartment dwellers (124 sq. ft.).

Besides the Los Angeles County to Collin County moving route, Californians get to enjoy an additional 1,000 square feet of living space when they buy a home after traveling on two other moving routes to Collin County: From Santa Clara County to Collin (1,002+ sq. ft.) and from Orange to Collin (1,000+ sq. ft.). In both cases, Californians get a home that’s on average 57% larger than the ones in their state of origin. Switching Los Angeles County for Denton County will also bring newcomers from the Golden State an additional 930+ square feet of living space at home.

The route between the Los Angeles and Denton counties is the second-most generous to renters, who get apartments that are more spacious by 95 square feet in their new Texas location. Following close behind is the route between Los Angeles and Harris counties, which increases living space by 94 square feet when moving to a typical apartment in the Texas destination.

In a surprising twist, two moving routes come with a reduction in living space. Heading from Orange County – which is anchored by the city of Santa Ana and where apartments average almost 870 square feet – to Travis and Dallas counties results in smaller living quarters for renters. Apartments in these two Texas counties offer, on average, about 860 square feet of space.

The California to Texas moving trend has been well-established for many years and continues to be a popular relocation route. Californians welcome the much lower cost of homes, with differences in home prices between the two states varying from $300K to $1M+ depending on the moving route. Apartment renters also see their monthly rents drop by a half, or more, when they swap California for Texas. With the Lone Star State seeing continuous migration from California and other places as well, demand for housing has been fueling construction across the state. It’s no wonder several Texas metro areas came to forefront for intense construction across the board in the past decade. With a vibrant employment market and plenty of entertainment opportunities, Texas is set to remain an attractive state to move to for both individuals and businesses.

Here’s an overview of the Texas to California migration considering the 25 most popular interstate relocation routes:

What the experts are saying

Rogelio Saenz, Ph.D. Professor, Department of Demography at the University of Texas at San Antonio 

1. What is the main driver of the rising flow of Californians to Texas?

Over the last few decades, journalists and pundits have regularly pondered and speculated about the rising flow of Californians moving to Texas and the social, economic, and political implications of this movement. During the pandemic, with the greater possibility of working remotely, we have seen large numbers of persons fleeing high-cost cities, such as Los Angeles and San Francisco, and resettling in more affordable locales, such as Texas. California is now a regular exporter of people, particularly to Texas.

Throughout the course of the 20th century, no other state has sent more interstate migrants to Texas than California. According to data from the American Community Survey 5-Year Estimates, the number of people leaving the Golden State for the Lone Star State has grown by 36 percent between 2016 and 2021 while the migration stream from all other states to Texas did not change, rising a mere 0.1 percent. Californians accounted for a little bit more than 15 percent of persons migrating to Texas from other states between 2017 and 2021.

While there is undoubtedly a series of factors fueling this movement, the steep housing prices and cost of living in California represent major reasons. One way to assess the difficulties in purchasing a home in California or Texas is to compute the ratio of the median household income to the median home value in each state. According to the 2021 American Community 1-Year Estimates, the value of homes was $7.63 for every $1 of household income in California in 2021 compared to $3.55 per $1, respectively, in Texas. The median value of a home in California was 2.7 times higher than in Texas in 2021.

2. Who are the Californians moving to Texas?

People moving to Texas between 2017 and 2021 are relatively young (median age of 29), a bit more likely to be male (105 males per 100 females), and to be well educated (47 percent of persons 25 and older have a bachelor’s degree or higher). Compared to the racial and ethnic composition of the Texas population, newcomers arriving from California are disproportionately white (44.3%) and Asian (12.8%), although Latinos (28.5%) and Blacks (9.4) together make up close to two of five Californians moving to Texas.

3. How does this migration pattern influence the cost of living in Texas?

Although a variety of factors are responsible for the rising home values in Texas, California migrants undoubtedly lend a hand to climbing home prices. While home prices in Texas are still much more affordable than in California, the median home value in Texas rose by 30 percent between 2016 and 2021 compared to an increase of 20 percent in California. Further, Californians who moved to Texas between 2017 and 2021 live in homes with a median value 60 percent higher than the median value of homes of Texans who did not move during this time and 19 percent higher than that of migrants originating from all other states in the country beside California.

4. Do you think this moving trend is likely to continue in the future?

Over the first two decades of the 21st century, the movement of people leaving California for Texas has been well established. No other state has sent more migrants to Texas than California during this time. The continual soaring housing prices and cost of living in California and much greater affordability in Texas is likely to sustain the significant flows of Californians toward Texas in the coming decades.

Doug Ressler, Business Intelligence Manager - Yardi Matrix

What is the main driver of the rising flow of Californians to Texas?

Migration patterns are closely connected to the dynamics of economy in the post-pandemic world. Inflation continues to be a major concern, putting a financial strain on many people as they spend more of their income on typical expenses. As a result, moving to places that are easier on the wallet seems like the obvious solution, with many people crossing city and state lines to find a more suitable place to live.

In 2021, Harris County saw the most migration to Texas, with close to 69K movers coming here, followed by Bexar County (48K people) and Dallas County (45K people). For all these top three counties, most movers originated from California.

Looking at the overall in-bound migration trends, Garza County (7.8%), Kaufman (7.5%) and Comal (6.9%) counties saw the highest percentages of incomers in 2021. Based on the preliminary data from the U.S. Census Bureau’s Vintage 2022 estimates, Kaufman also ranked among the counties experiencing the largest population gains by percentage compared to 2021, along with Rockwall and Parker counties.

Methodology

This analysis was done by StorageCafe, an online platform that provides storage unit listings across the nation.

For this report, we investigated the most recent California to Texas moving data provided by IPUMS Survey Documentation and Analysis (SDA) tool, 5-year estimates (2017- 2021).

IPUMS means Integrated Public Use Microdata Series and provides census and survey data from around the world integrated across time and space. IPUMS is a part of the Institute for Social Research and Data Innovation at the University of Minnesota. Authors: Steven Ruggles, Sarah Flood, Matthew Sobek, Danika Brockman, Grace Cooper, Stephanie Richards, and Megan Schouweiler. IPUMS USA: Version 13.0 [dataset]. Minneapolis, MN: IPUMS, 2023. https://doi.org/10.18128/D010.V13.0

We identified the top 25 most popular moving routes leading from California to Texas based on individual move-ins by county. Data on generations and household income (referred to as "family income" in the source) also came from IPUMS.

For data on median home prices and median square footage of homes in both California and Texas counties we turned to Point2 listings from April 2023.

To find out about savings for homebuyers, we calculated both the numerical and percentage difference between home prices in Californian and Texas counties. Similarly, we also calculated the difference between median square footage in homes (single family homes and apartments) located in California and Texas for the selected moving routes.

Rental data for both California and Texas counties came from StorageCafe’s sister division Yardi Matrix, a business development and asset management tool for brokers, sponsors, banks and equity sources underwriting investments in the multifamily, office, industrial and self storage sectors.

Savings for renters came from calculating the numerical and percentage difference between rent rates in Californian and Texas counties.

Unemployment data came from the U.S. Bureau of Labor Statistics and reflects figures for March 2023.

Fair use and distribution

This study serves as a resource for the general public on issues of common interest and should not be regarded as investment advice. The data is true to the best of our knowledge but may change if amendments to it are made. We agree to the distribution of this content but we do require a mention in return for attribution purposes.