California has been shrinking for the past half-decade. The state’s population fell 0.5% between April 2020 and July 2025, according to the U.S. Census Bureau. It also posted the largest net loss of one-way U-Haul customers of any state for the sixth straight year in the company’s 2025 Growth Index. Yet the country’s youngest adults keep packing up and heading for the Golden State.
U-Haul’s 2026 Midyear Migration Trends National Report ranks states and metros by their net gain of one-way U-Haul trucks, trailers, and U-Box containers from July 2025 through June 2026. It puts California at No. 2 for Gen Z (born 1997–2012), behind only Texas. As Fortune previously reported, the state didn’t crack the top 10 for boomers or Gen X, whose moves skewed heavily toward the Southeast. San Diego, at No. 9 for Gen X, was the only California metro on either older generation’s list. Millennials ranked California No. 3, behind Florida and Texas.
Gen Z hasn’t given up on the Sun Belt. Texas tops its list, and Florida, Nevada, Austin, Charlotte, and Houston all make its top 10. But the generation’s picks look less like a hunt for warm weather and low costs and more like a hunt for people. After Texas and California, Gen Z’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’s a shift from recent trends that saw young workers leave San Francisco for more affordable cities like Nashville and Orlando, and from rankings that name cheaper Midwest and Texas cities as the best places for new grads.
The biggest job market in the country
California’s scale is hard to compete with. It has been the most populous state since 1962, when it passed New York. Even after five years of decline, it has about 39.4 million residents, roughly 11.5% of the U.S. population.
That population supports a huge job market, which matters for a generation just starting its careers. California had 18.2 million nonfarm payroll jobs in August, more than any other state. It also led the nation in monthly job gains, adding 39,400, 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 isn’t all rosy. California’s unemployment rate remains among the highest in the country, and the state’s Legislative Analyst’s Office has warned that early-2026 job growth may have been overstated. Still, few states offer early-career workers as many employers in as many industries, from Nvidia, Apple, and Google to Hollywood’s major studios.
Expensive, but so is everywhere else
California remains one of the country’s priciest places to live. The median value of an owner-occupied home is $734,700, and median gross rent is $2,036, according to Census Bureau data for 2020 to 2024.
Gen Z, though, is being squeezed almost everywhere. A record 1 in 3 adults under 35 lived with their parents in 2025, most of them employed. Because so many young Americans grew up in California, moving home often means moving back to the Golden State. 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. Others are getting help from family to stay in expensive cities. A Bank of America study found that 54% of 18- to 27-year-olds pay nothing toward their housing costs.
California’s taxes are among the nation’s highest, but the state also offers a broader social safety net than many others, which can cushion young workers between jobs.
The lifestyle premium
Then there’s the pull that has drawn Americans west for generations. California has beaches, mountains, deserts, and forests, and in parts of the state you can ski in the morning and surf in the afternoon. Much of the coast enjoys a Mediterranean climate that keeps temperatures mild year-round. For many young movers, the high cost of living is a worthwhile premium.
U-Haul’s data has limits. Not every mover rents from U-Haul, and not every one-way rental is a permanent change of address. Each move is credited to the generation of whoever signs the contract, and customers must be 18 to rent a truck, so the youngest members of Gen Z aren’t captured. Millennials and Gen X together account for more than 60% of the company’s one-way rentals.
Still, the data suggests that California’s scale keeps pulling young Americans in, even as the state loses residents overall: its jobs, its people, and the family ties that bring them home.
This story was originally featured on Fortune.com
