What Is the Typical Price of Upper Middle-Class House In the US? Includes House Price by State

Table Of Content

• The shrinking American middle class meets the pandemic’s great housing inventory crisis
• The pandemic killed the dream of middle-class homeownership
• For most Americans, owning a home is now a distant dream
• Are you in the American middle class? Find out with our income calculator
• Biden Tax Increases Won’t Hit Middle Class, Yellen Says
• Methodology: 2023 focus groups of Asian Americans

The middle class, once the economic stratum of a clear majority of American adults, has steadily contracted in the past five decades. The share of adults who live in middle-class households fell from 61% in 1971 to 50% in 2021, according to a new Pew Research Center analysis of government data. Another affordable housing option for the middle class in Los Angeles is townhomes and condos.

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The shrinking American middle class meets the pandemic’s great housing inventory crisis

The terms “middle income” and “middle class” are used interchangeably in this analysis for the sake of exposition. But being middle class can refer to more than just income, be it the level of education, the type of profession, economic security, home ownership, or one’s social and political values. The demand-side troubles of the current housing market may see some respite shortly.

The pandemic killed the dream of middle-class homeownership

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Household incomes have risen considerably since 1970, but those of middle-class households have not climbed nearly as much as those of upper-income households. The median income of middle-class households in 2020 was 50% greater than in 1970 ($90,131 vs. $59,934), as measured in 2020 dollars. These gains were realized slowly, but for the most part steadily, with the exception of the period from 2000 to 2010, the so-called “lost decade,” when incomes fell across the board. This report analyzes data from the Annual Social and Economic Supplements (ASEC) of the Current Population Survey (CPS) to study how the economic status of the American middle class has changed since 1971. It also examines the movement of demographic groups in and out of the American middle class and across lower- and upper-income tiers from 1971 to 2021.

For most Americans, owning a home is now a distant dream

Compared with a year ago, the market has become even tougher for homebuyers to navigate. When it comes to financing your home, shopping around for the best mortgage rates is crucial. Interest rates can significantly impact the overall cost of your mortgage, so it’s essential to compare rates from different lenders. Older single-family homes can be a great option for middle-class families looking for affordability and charm.

Capital Gain Tax Increase

The state also has a reasonable cost of living and a variety of lifestyles to suit everyone’s needs. A recent Zippia report lists the salary you'd need to earn in each state to be middle class based on home costs and other expenses. The table below compares Zippia's middle-class income requirement, beginning with the highest cost of living, relative to the median household income based on data from the US Census Bureau's 2019 American Community Survey.

This 3.8% net investment income tax applies if you have modified adjusted gross income above $250,000 if you are married and filing taxes jointly. If you sell your stock, property or crypto and you’ve held it for more than one year, you get a classic tax break. If your taxable income is $47,025 or less, you pay zero tax on your long-term capital gain. If your taxable income is from $47,026 to $518,900, you’ll pay 15% on your long-term capital gain.

Outdoor spaces provide a breath of fresh air and can serve as an extension of your living space. If you have children or pets, a yard can be a great place for them to play and explore. Research has shown that spending time in nature can reduce stress and improve overall well-being. Townhomes and condos are often found in planned communities or complexes that offer shared amenities like pools, gyms, and playgrounds. With a mix of historic homes and modern developments, East LA provides an eclectic and vibrant living experience.

Many of the least affordable cities in the country were located in California, with San Jose taking top spot, quickly followed by coastal cities including San Francisco, Los Angeles, and San Diego. "Cash has always been king in real estate, but it has been limited to a small group of buyers," he said. "Without the all-cash offer, we wouldn't have gotten the house," Wai, 51, noted.

LOS ANGELES - It's no secret that California remains one of the most expensive states to live in. Emma is a graduate of Domestic Science or Family and Consumer Sciences (Home Economics) from the University of Wisconsin. She has 7 years of experience Working with the strategic section of BestBuy and now writing full-time for Homeeon.

Among homeowners, both low-income and middle-income earners lost ground, comprising a smaller fraction of the homeownership pie in 2020 compared with 2010. Meanwhile, a much larger chunk of high-income earners became homeowners in the same decade. Wai said that when he and his wife came across a home they wanted to buy in Woodland, California, they were able to immediately make an all-cash offer — even though they hadn't sold their current home near San Francisco. That idea caught John Wai's attention when the accountant decided to move to a smaller home after becoming an empty-nester. He said he started researching how to make an offer more compelling to sellers and came across Flyhomes, which provides bridge loans to customers so they can make an all-cash offer. "This past weekend, one of our agents had a home with multiple offers. A prospective buyer had a time share they didn't use, so they offered a seven-night vacation in their time share and $1,000 in Bitcoin," she said.

Since 1989, the value of real estate wealth owned by the top 1% has grown by 772%, while the 50th through 90th income percentiles have grown by 359%, according to data from the Federal Reserve. This middle-income percentile had the slowest rate of growth of any on record, surpassed even by the bottom 50%. That helps buyers who need to sell their current home to buy their next property, an issue when sellers don't want to accept contingencies, Garg added. And it gives a competitive edge to people who haven't been able to built up equity through homeownership. Flyhomes, which makes money through loans as well as by acting as agents for buyers and sellers, is designed to "make every buyer a cash buyer," said Tushar Garg, CEO and co-founder of Flyhomes.

For example, in 2021, adults ages 65 and older and Black adults were still more likely than many other groups to be lower income, and less likely to be middle or upper income. The median income for lower-income households grew more slowly than that of middle-class households, increasing from $20,604 in 1970 to $29,963 in 2020, or 45%. In Fannie Mae’s January housing forecast report, analysts at the government-sponsored organization predicted that costs will eventually start decelerating and the market will cool, but prices will remain higher than pre-pandemic times.

Black adults, as well as married men and women, were also among the biggest gainers from 1971 to 2021, with net increases ranging from 12 to 14 percentage points. Those two things don’t go hand in hand anymore, according to a new study by the National Association of Realtors, the trade association for the real estate industry. And more properties are expected to enter the market this spring, said Evangelou of NAR. Home construction is picking up, and supply-chain issues may ease later this year, which would help with home-building since some parts and supplies are hard to come by at the moment.

As we discussed earlier, the cost of upper-middle-class houses varies significantly by state. This variance is because almost every state has its economic range of what income is perceived as upper middle class. What is considered an upper-middle-class house in one state can easily be middle-class in the next. Back then, they were often modest and stable, designed to incentivize homeownership.

To do otherwise would cause too much controversy and take away from the purpose of helping expecting families or existing families buy (or rent) the most family-friendly house. As a result, a good house layout that accommodates our work and family life is important. As of April 2022, 52% of adults consider themselves middle or upper-middle class. The latest data from the Pew Research Center shows the middle class has been shrinking in the last five decades, hovering around 50%. Dries, an art teacher, and Nicky, who works in school administration, faced a rent bump on their downtown Long Beach one-bedroom, to about $2,650 a month, that would have strained their budget. Rather than downsize or move into a more rundown place, they planned to move to Pittsburgh “where everything is cheaper” and Dries has family.