(The Center Square) – Starter homes now cost over $1 million in 113 California cities, according to a new report from Zillow, highlighting the state’s skyrocketing cost of housing and impact on sustained domestic outmigration.
Starter homes cost over $1 million in 233 cities, meaning 57% of cities where starter homes cost over $1 million are in California.
Zillow’s report closely tracks recent findings from the state-funded Legislative Analyst’s Office, whose housing affordability report for the first quarter of 2025 found “a bottom-tier home in California is now about 32 percent more expensive than a mid-tier home in the rest of the U.S.”
The monthly payment to mortgage a “bottom-tier” home, defined as a home in the fifth to 35th percentile range is $3,556, or 79% more than the typical household rent of $1,992 per month.
To comfortably afford purchasing a “bottom-tier” home in California and not spend more than 30% of household income on housing, a family must make $11,853 per month, or $142,240 per year.
With the California median household income at $96,334, according to the U.S. Census Bureau, a family must make 48% more than the California median to afford a “bottom-tier” home, or nearly two and a half times the median income to afford a “middle-tier” home. That makes home ownership out of reach for most California families.
As a result, housing costs have 45% of Californians considering moving, with three-quarters of those considering moving due to the cost of housing open to moving out of the state, according to polling from the Public Policy Institute of California.
This sentiment has been borne out in the sustained net outmigration of Californians out of the state, which started in 1990 and significantly accelerated during the COVID-19 pandemic era. Outmigration peaked in 2021, when 373,083 more Americans moved out of California than moved in.
Outmigration has since declined but remains high, falling to a net loss of 275,572 Americans in 2022, 249,308 in 2023, and 197,016 in 2024.
California’s population only returned to growth in 2023 and 2024 due to high levels of international migration, with newcomers statistically much poorer than those moving out, resulting in net losses of personal income for the state.
According to the U.S. Census, net personal income losses from outmigration were $24 billion from the mid-2021 to mid-2022, in part leading S&P to warn that outmigration could impact public credit ratings should the state not “adapt by cutting expenditures.”
