$150K income Is considered ‘Lower Middle Class’ in these High-cost cities
The influence of a six-figure salary (or more) is beginning to fade, especially in expensive U.S. cities, pushing many earners into what’s now classified as “lower middle class.”
“In America’s most expensive cities, the bar has definitely been raised to be considered ‘middle class,’” said Andrew Murray, lead content data researcher at GOBankingRates, in an interview with Fox News Digital. “To escape the lower middle class, you’ll need to earn as much as $150,000, wnhich is substantially higher than what it used to be.”
In certain high-cost cities, an annual salary of $150,000 no longer guarantees middle-class status, with many individuals now considered “lower middle class” based on recent data from GOBankingRates.
Northern California and Virginia are at the forefront, where the threshold for lower middle class income ranges from $128,964 to $152,652, among the five priciest cities.
The cities where the highest incomes are still considered “lower middle class” include: Arlington, Virginia; San Francisco; San Jose, California; Irvine, California; Seattle; Gilbert, Arizona; Plano, Texas; Scottsdale, Arizona; Washington, D.C.; and Chandler, Arizona.
According to GOBankingRates, a salary of $150,000 is regarded as lower middle class in cities such as Arlington, Virginia; San Francisco; San Jose, California; Irvine, California; and Seattle. (Getty Images)
“As high as $150,000, you’ll need more than six figures just to escape the lower middle class in the top 15 cities. Given these high income demands, many Americans are choosing to relocate to more affordable cities, where the average earnings hover around $75,000,” explained Murray.
GOBankingRates pointed out in the analysis that the 25 most expensive cities also feature significantly higher housing, childcare, and transportation costs compared to national averages. Murray noted that housing and real estate prices are among the most influential factors when it comes to determining affordability and wealth status.
“Eight of the top 25 cities are located in Virginia, Washington, and Arizona. Although Virginia and Washington state typically have a higher cost of living, the cities included in this list all boast exceptionally high median household incomes,” Murray added.
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“Most notably, Arlington, Virginia, located just outside of Washington, D.C., holds the highest median household income of any city in the study, at nearly $140,000,” he continued. “Meanwhile, Seattle and Gilbert both have median household incomes above $115,000. Notably, all three of the Arizona cities on the list are located in the Phoenix metro area.”
California dominates the list, taking seven out of 25 spots, largely due to its housing costs.
“It’s no secret that California housing prices are among the highest nationwide. According to the Bureau of Labor Statistics, Californians can expect to pay close to $30,000 per year for housing alone,” Murray pointed out.
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“This means anyone wishing to live comfortably in California needs to be a high-income earner, which is reflected in our findings. Cities like San Francisco, San Jose, and Irvine — the top three California cities on our list — all have median household incomes over $120,000,” he added. “That’s nearly $50,000 higher than the national median income.”
According to U.S. Census data, the national median household income was just under $75,000 in 2022. Murray expanded on how the research shows that the definition of “rich” is highly relative depending on location.
“Our findings show that the income needed to be lower middle class in San Francisco ($152,652) is nearly four times what’s needed in Cleveland ($41,412),” he explained. “In another recent study, GOBankingRates revealed that the income required to be ‘rich’ (top 5%) in Massachusetts exceeds $200,000 more than in Mississippi.”
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The most significant takeaway from the study, according to Murray, is the sharp rise in income expectations in high-cost cities.
“A six-figure salary is no longer sufficient to break free from the lower middle class in 15 cities. In three cities, even a $150,000 salary falls short,” he concluded. “Prospective homebuyers should keep these income variations in mind when choosing where to live.”
Article based on the analysis done by GoBankingrates
