California keeps losing residents overall, but young adults are still voting with their feet for the Golden State.
U-Haul's 2026 Midyear Migration Trends National Report ranked California No. 2 for Gen Z, behind only Texas. The company said the ranking covers one-way U-Haul trucks, trailers, and U-Box containers from July 2025 through June 2026. California did not crack the top 10 for boomers or Gen X. Millennials ranked California No. 3, behind Florida and Texas.
The state has been shrinking for the past half-decade. The U.S. Census Bureau said California's population fell 0.5% between April 2020 and July 2025. U-Haul also said California posted the largest net loss of one-way customers of any state for the sixth straight year in its 2025 Growth Index.
But Gen Z is not moving like older Americans. After Texas and California, the generation's top five states are New York, Illinois, and Colorado. Its top five metros are New York City, Dallas-Fort Worth, Chicago, the San Francisco Bay Area, and Los Angeles. U-Haul said Gen Z is gravitating to densely populated markets with lots of colleges, entry-level jobs, and apartments.
That matters because California still has scale. The state has about 39.4 million residents, roughly 11.5% of the U.S. population. It has been the most populous state since 1962. It also had 18.2 million nonfarm payroll jobs in August, more than any other state, and added 39,400 jobs that month, according to the Bureau of Labor Statistics. The state's Employment Development Department said it added 138,500 jobs over the past year.
The picture is not clean. California's unemployment rate remains among the highest in the country. The state's Legislative Analyst's Office has warned that early-2026 job growth may have been overstated. Even so, few states offer as many employers in as many industries, from Nvidia, Apple, and Google to Hollywood's major studios.
Price is the obvious brake. Census Bureau data for 2020 to 2024 show a median value of an owner-occupied home of $734,700 and median gross rent of $2,036. California's taxes are among the nation's highest, but the state also offers a broader social safety net than many others.
Gen Z is being squeezed almost everywhere. A record 1 in 3 adults under 35 lived with their parents in 2025, most of them employed. One analysis cited by Fortune found that 20% of working adults in Greater Los Angeles live with their parents, compared with 6% in the Austin metro. A Bank of America study found that 54% of 18- to 27-year-olds pay nothing toward their housing costs.
For a free-market reader, the lesson is plain. The market has not abandoned California's labor base, even as population trends weaken. Large job markets still draw young workers, but the price is high, and the taxpayer-backed safety net helps cushion the blow.
Capital rewards clear rules and dense opportunity. California still has both in scale, even while its costs, taxes, and housing burden push against the very people it needs to keep growing.
