California reported one of the biggest drops in homelessness in the past year, new federal data shows. The US Department of Housing and Urban Development released the report. California recorded 181,934 unhoused people in 2025, a drop of about 3 percent from the year before. This placed the state among the top five states with the largest decreases. Other states saw larger drops, including Illinois, Hawaii, Florida, and New York. Illinois reported a 44 percent drop while Hawaii saw 41 percent. Florida saw an 11 percent drop and New York an 8 percent drop. The report suggests progress under California Governor Gavin Newsom. He has increased efforts to reduce homelessness across the state. In 2025 he backed a model rule for cities to manage encampments. The state also approved 3.3 billion dollars for housing and treatment programs. California and New York still have the largest unsheltered populations in the country. Homelessness remains a major issue in political races in California cities. At the national level homelessness fell for the first time since 2016. It dropped about 3 percent compared with the previous year. The total number was 745,652 people on a single night in January 2025. The US Department of Housing and Urban Development U.S. Department of Housing and Urban Development said the small drop does not show strong long term progress. Housing Secretary Scott Turner said past housing first policies failed. He said new programs will focus on recovery and self sufficiency. Officials also linked some improvements to changes in immigration policies. They said decreases were stronger in sanctuary cities. The data comes from the federally required point in time count. It measures people in shelters and on the streets on one night. In January 2025 it recorded 745,652 homeless people across the United States. Advocates said the drop is welcome but warn progress may not last. Ann Oliva of the National Alliance to End Homelessness said gains came from strong housing support in 2024. She warned that cuts could push people back into homelessness. The group warned that proposed cuts could affect about 170,000 people. It said this could undo recent progress in housing stability. The federal government also changed some housing rules in recent years. It required treatment programs for some voucher recipients. It also limited harm reduction policies in some areas. In April 2026 HUD proposed a rule on shelter placement based on birth sex. The rule has sparked debate among housing and civil rights groups. Supporters say it improves safety and clarity in shelters. Critics say it could limit access for transgender people. The point in time count is used each year to track homelessness trends. It is required by the federal government for all states. Experts say it helps show short term changes but not full numbers. California has faced rising housing costs for many years. Many cities have struggled to provide enough shelter beds. Officials say new funding aims to expand housing supply. Local leaders say coordination between cities and state has improved. They point to faster placement into housing programs. Service groups still say demand is higher than supply. Some regions continue to report high levels of unsheltered homelessness. Urban areas remain the most affected. Rural areas also face growing pressure in some states. Officials say continued funding will be key to future progress. They stress long term housing solutions as a priority. The latest data will likely shape upcoming political debates across the United States. Lawmakers are expected to use the report in policy discussions. The issue remains one of the most closely watched social challenges in the country. Analysts say small improvements are positive but uneven across states. They caution that long term progress depends on stable housing policy. The report highlights both progress and ongoing challenges in addressing homelessness. Officials say future results will depend on funding and policy changes. The debate over housing strategy is expected to continue nationwide. Many states are watching California as they plan their own response.