Why are wealthy millennials leaving blue states for red states

Wealthy millennials , aged 26 to 45 and earning over $200,000 annually, are increasingly moving from blue coastal states like California and New York to red southern states such as Florida and Texas, according to a recent study.

As per Jaclyn DeJohn, managing editor at SmartAsset , the combination of high costs, taxes, and regulations continues to drive demographic shifts as long as disparities persist between California and other states.

The analysis of 2021 and 2022 tax return data shows a significant migration of affluent individuals from Generation Y.

California lost the most wealthy millennial households, with a decrease of 9,181. New York followed, losing 4,251 households. Despite attracting 14,139 high-earning millennials, California saw a total of 23,320 leave, indicating a clear trend away from the state. Similarly, New York gained 11,340 wealthy millennials but ultimately lost 15,591 during the same period.

The high cost of living in California and New York is making people move to more affordable states like Florida, Texas, and North Carolina. Wealthy millennials, who earn over $200,000, are choosing these states for better economic freedom .

This shift can have a big impact on the local economies of California and New York as they lose high-earning residents.

Home affordability in California has hit a 16-year low because borrowing costs are going up and there aren't enough homes for sale. Across the US, the typical household needs to make about $104,800 a year to afford a home that costs around $391,700. That's just over half of what SmartAsset says is wealthy for millennials.