Relocation
States People Are Fleeing in 2026
By Marcus Webb · March 31, 2026
New Jersey, New York, and California are losing residents at record rates in 2025. High taxes, rising costs, and restrictive laws are pushing millions toward lower-cost states. Here is where people are leaving, and why.
New Jersey had 62% of its moves going outbound in 2026, the highest share of any state in the country. New York and California both hit 58%, meaning nearly 3 in 5 people who hired a moving truck were heading somewhere else.
The States Losing the Most People
The 2026 National Movers Study puts New Jersey, New York, and California at the top of the outbound list by percentage of total moves. On a raw volume basis, California and New York still dominate simply because they are large states, but the percentage figures reveal something more telling: a structural, sustained exit.
Alaska leads on a different metric. A full 57% of all moves involving Alaska are outbound, which is striking given the state's relatively small population. Kentucky and New Mexico both sit at 56% outbound. These are not coastal high-cost states. Their exodus is driven by a different set of pressures, including limited job markets and economic stagnation, rather than the tax-heavy environments driving departures from the Northeast and California.
At the city level, the numbers get sharper. Hagerstown, Maryland had 88% of its moves going outbound. Nassau-Suffolk, New York hit 78%. Pueblo, Colorado reached 74%. These metro areas are bleeding residents faster than their state averages suggest.
Why People Are Leaving: It Comes Down to Taxes and Cost
New Jersey's effective property tax rate is 2.13%, the highest in the country. A median-priced home in the state generates over $8,000 in property taxes annually. For residents on fixed incomes or middle-class salaries, that number is not sustainable, especially when paired with a state income tax rate that tops out at 10.75%.
New York's top marginal income tax rate is 10.9% at the state level, and New York City residents stack another 3.876% on top of that. California taxes ordinary income at up to 13.3%, which also applies to long-term capital gains. That matters enormously for anyone selling a business, a second property, or a stock portfolio. Our breakdown of capital gains tax by state shows just how large that gap is compared to states like Texas, Florida, and Nevada.
Cost of living compounds the tax burden. Median rent in San Francisco exceeds $2,800 per month. In New York City, it is above $3,500. When remote work made geography optional, the math changed for millions of households. A software engineer earning $180,000 in California keeps substantially more of that salary in Texas or Tennessee, even before accounting for housing costs.
Where Are They Going?
The top destination states in 2026 are Florida, Texas, South Carolina, Tennessee, and North Carolina. All five have either no state income tax or relatively low tax rates. Florida and Texas have no state income tax at all. Our post on states with no income tax in 2026 breaks down exactly what that saves the average household.
South Carolina and North Carolina are drawing retirees specifically because of favorable treatment of retirement income. Tennessee exempts Social Security benefits entirely and has no wage income tax. For households living on investment income or pension distributions, the difference in annual tax liability can run into thousands of dollars per year.
Interstate migration is also reshaping political and economic power. States losing population lose congressional seats and electoral votes. California lost a House seat after the 2020 census. Texas and Florida gained them. This trend is continuing into 2026, and the 2030 reapportionment will likely deepen it.
The Retiree Factor
Retirees are not just a footnote in this migration story. They are a primary driver. Seniors on fixed incomes are acutely sensitive to property taxes, income taxes on Social Security, and overall cost of living. New Jersey taxes Social Security benefits. So does Colorado, which appeared on multiple outbound lists this year despite its reputation as an attractive western state.
Florida exempts Social Security entirely and has no state income tax, which is a significant financial advantage for retirees. If you are planning a move in retirement, the best states for retirees to avoid taxes breaks down the full picture by state.
Use our state comparison calculator to run your own numbers and see exactly how much your tax burden would change if you moved.
Key Takeaways
- New Jersey led all states with 62% outbound moves in 2026, followed by New York and California at 58% each.
- New Jersey's 2.13% effective property tax rate is the highest in the country, and its top income tax rate reaches 10.75%.
- The top destination states, including Florida, Texas, Tennessee, and South Carolina, offer either no income tax or significant exemptions on retirement income.
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