People think I am full of it when I say that my household income (largish household with kids) is a quarter million a year and we are basically living like we are middle class. Money just doesn’t go as far as it used to.
As a millennial, I never would have imagined working my way up to this point only to find I can’t even buy a house. Oh sure, I could make the bare minimum down payment and get stuck with a super high mortgage payment, but if I lose my job or become disabled or unable to work, we would have no way to pay for it.
Groceries, housing, and insurance costs have more than doubled for us since 2019.
Same. My wife and I are in the process of trying to buy a house over an hour from town, because it’s the only way we’ll ever be able to afford one, and it’s still more than what our landlord paid for the house we’re renting. Housing prices have tripled in the last 8 years here. They doubled in the last two years alone. The house we’re renting would cost a million dollars to buy today and our landlord has a $1000 per month mortgage on it since she bought it right before the housing explosion. It’s pretty wacky that you can become a millionaire just by having been alive and financially stable a few years earlier, while everyone else is destined to be poor for the rest of their lives, even if they’re making a quarter million dollars per year.
It’s a normal-ass 1960’s neighborhood that your parents would have paid normal-ass prices for. The job market here exploded over the last 20 years, so there’s just too many people and not enough land. I’m one of those people, so it’s not like I don’t contribute to the problem.
There are neither too many people nor not enough land, but too many houses from the 60s passed down with initial property tax values and too many NIMBYs preventing new construction of large apartment buildings.
There are tons of big skyrise apartment complexes and dozens more in the works. But they all get labeled “luxury apartments”, despite basically being tiny little rectangles with no windows except for a sliding glass door at the end, and they cost just as much as a house to rent. The more traditional apartments have mostly been converted to condos and they’re also very expensive. It’s just crazy expensive here, despite your choices! Lots of people commute for over an hour each way and then it’s still a half million dollars for a decent house. You have to live at least an hour and a half in the right direction to get something for less.
People live in worse apartments they can afford, so they buy a luxury apartment. Their apartment is now open to a person who could afford that apartment, but not the luxury apartment, so theirs gets filled. This repeats down the chain of quality/desirability/cost.
Every new apartment adds supply, thus adding negative price pressure.
$250,000 a year is middle class and has been for a long time - it’s about how much a doctor (who isn’t in a particularly high-paying specialty) makes. But DINKs with that household income could afford a million-dollar house.
They’re saying that someone that makes $250,000 today lives the lifestyle that would have been considered middle class 20 years ago, not that that salary is at all a median
They absolutely do not live remotely like middle class people from 2003. I graduated high school in 02 and my parents were mailmen. The difference in living standard is not even close.
I wasn’t saying that I thought that, I didn’t give my take at all, I was trying to be helpful in explaining what the other commenter meant. But since you’re calling me crazy…
To give my take on it, you’re right, there’s all sorts of ways that the lifestyles aren’t at all comparable, many things haven’t had the insane inflation that real estate has, so a person making 250k can obviously take a lot more vacations, go out to dinner more, buy more tech, etc than a middle class person from a few decades ago. But when it comes to buying homes, it gets a lot more comparable. Homes where I grew up have increased 4-5x in price over the last 25 years, so a family with a household income of 60k-ish (which is solidly middle class) buying a house that’s 3x their annual income would have been pretty typical in the early 2000’s. Now, if those same houses are being bought by households making 250k, it would be basically the same ratio of 3-4x their income.
So in home purchasing power (and that area only) low 6 figures is absolutely middle class, and anyone making under 6 figures has the home purchasing power of what used to be lower class
My personal definition of “upper class” excludes anyone who actually has to work. Wikipedia seems to agree, putting “CEOs and successful business owners” in the upper middle class. And the New York Times considers the 90th to 99th percentile of earners upper-middle-class.
I do see some places defining “upper class” as those earning at least twice the median household income (so about $150,000) but I don’t think that matches common usage. Is a software developer right out of college upper class? Or a nurse practitioner? I would say “clearly no, unless they happen to be from a very wealthy family”.
People think I am full of it when I say that my household income (largish household with kids) is a quarter million a year and we are basically living like we are middle class. Money just doesn’t go as far as it used to.
As a millennial, I never would have imagined working my way up to this point only to find I can’t even buy a house. Oh sure, I could make the bare minimum down payment and get stuck with a super high mortgage payment, but if I lose my job or become disabled or unable to work, we would have no way to pay for it.
Groceries, housing, and insurance costs have more than doubled for us since 2019.
Same. My wife and I are in the process of trying to buy a house over an hour from town, because it’s the only way we’ll ever be able to afford one, and it’s still more than what our landlord paid for the house we’re renting. Housing prices have tripled in the last 8 years here. They doubled in the last two years alone. The house we’re renting would cost a million dollars to buy today and our landlord has a $1000 per month mortgage on it since she bought it right before the housing explosion. It’s pretty wacky that you can become a millionaire just by having been alive and financially stable a few years earlier, while everyone else is destined to be poor for the rest of their lives, even if they’re making a quarter million dollars per year.
Where in the world is this?
Also, is that a high-end neighborhood or a middle-class/lower class neighborhood?
It’s a normal-ass 1960’s neighborhood that your parents would have paid normal-ass prices for. The job market here exploded over the last 20 years, so there’s just too many people and not enough land. I’m one of those people, so it’s not like I don’t contribute to the problem.
There are neither too many people nor not enough land, but too many houses from the 60s passed down with initial property tax values and too many NIMBYs preventing new construction of large apartment buildings.
There are tons of big skyrise apartment complexes and dozens more in the works. But they all get labeled “luxury apartments”, despite basically being tiny little rectangles with no windows except for a sliding glass door at the end, and they cost just as much as a house to rent. The more traditional apartments have mostly been converted to condos and they’re also very expensive. It’s just crazy expensive here, despite your choices! Lots of people commute for over an hour each way and then it’s still a half million dollars for a decent house. You have to live at least an hour and a half in the right direction to get something for less.
People live in worse apartments they can afford, so they buy a luxury apartment. Their apartment is now open to a person who could afford that apartment, but not the luxury apartment, so theirs gets filled. This repeats down the chain of quality/desirability/cost.
Every new apartment adds supply, thus adding negative price pressure.
My family house that we sold recently, sold for $1.2 million. It was bought in 94 for $90k. Expensive town, but the cheapest neighborhood in the town.
Average SFH price in many west coast cities is approaching 1M. 990k on average for my city
$250,000 a year is middle class and has been for a long time - it’s about how much a doctor (who isn’t in a particularly high-paying specialty) makes. But DINKs with that household income could afford a million-dollar house.
By what definition of middle class are you considering $250,000 to be middle class? That’s greater than the 90th percentile income.
They’re saying that someone that makes $250,000 today lives the lifestyle that would have been considered middle class 20 years ago, not that that salary is at all a median
They absolutely do not live remotely like middle class people from 2003. I graduated high school in 02 and my parents were mailmen. The difference in living standard is not even close.
It is crazy that you think this.
I wasn’t saying that I thought that, I didn’t give my take at all, I was trying to be helpful in explaining what the other commenter meant. But since you’re calling me crazy…
To give my take on it, you’re right, there’s all sorts of ways that the lifestyles aren’t at all comparable, many things haven’t had the insane inflation that real estate has, so a person making 250k can obviously take a lot more vacations, go out to dinner more, buy more tech, etc than a middle class person from a few decades ago. But when it comes to buying homes, it gets a lot more comparable. Homes where I grew up have increased 4-5x in price over the last 25 years, so a family with a household income of 60k-ish (which is solidly middle class) buying a house that’s 3x their annual income would have been pretty typical in the early 2000’s. Now, if those same houses are being bought by households making 250k, it would be basically the same ratio of 3-4x their income.
So in home purchasing power (and that area only) low 6 figures is absolutely middle class, and anyone making under 6 figures has the home purchasing power of what used to be lower class
My personal definition of “upper class” excludes anyone who actually has to work. Wikipedia seems to agree, putting “CEOs and successful business owners” in the upper middle class. And the New York Times considers the 90th to 99th percentile of earners upper-middle-class.
I do see some places defining “upper class” as those earning at least twice the median household income (so about $150,000) but I don’t think that matches common usage. Is a software developer right out of college upper class? Or a nurse practitioner? I would say “clearly no, unless they happen to be from a very wealthy family”.
Yes, a software developer in the 90th percentile of household income, making a single income, is most assuredly “upper class”
like 5% of the population makes $250,000
Yes, and IMO less than 1% of the population is upper class.
Sounds like you live in HCOL area where $250K is pretty much middle class.
250k household is not middle class anywhere in the United States.