Bank of America Study: Here’s What It Means To Be Middle Class Today
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Gabrielle Olya
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Caitlyn Moorhead
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What it means to be “middle class” is constantly evolving in terms of the salary needed to qualify and the demographics that make up this pivotal wealth category. A new Bank of America study is shedding light on middle-income households, including how much money they’re making, how old they are and whether or not they own homes.
Here’s a closer look at what it means to be middle class today.
Middle-Income Households Earn an Average of $80K
Across the U.S., a middle-income household earns around $80,000, the study found. However, this differs by circumstances, including family status.
Married middle-income households had a median income of about $103,000. A household with a single income stream had a median income of about $60,000, while a household with two or more income streams earned a typical income of about $136,000.
Age also dictates what’s “typical” for middle-income households, with households comprised of those ages 65 and older having average earnings of about $90,000.
Middle-Income Households Skew Younger
According to the study, Gen Z and millennials comprise a larger share of middle-income households than older ones, with Americans ages 25 to 44 making up nearly 40% of middle-income households.
“Part of the reason middle-income households skew slightly younger is that younger people are earlier in their career journeys and have the wages to match,” said Joe Wadford, an economist at Bank of America Institute. “It could also be that older middle-income households have recently retired, leaving more younger households in the workforce.”
Most Middle-Income Americans Own Their Homes
The majority of middle-income Americans (69%) are homeowners — only 30% are renters.
“Most Americans, including those earning middle incomes, own a home,” Wadford said. “But the recent increase in home prices and mortgage rates are pressuring younger households more, given older generations probably bought their homes when interest rates and home prices were much lower.”
He noted that younger middle-income Americans still aspire to be homeowners — despite rising home prices and mortgage rates — and are taking the financial steps now to make that possible.
“Gen Zers are at the point in their life where they just bought or are looking to buy as housing costs are rising fast,” Wadford said. “This is likely why they are pulling back on more ‘nice to have’ spending like airfare and restaurants, while older middle-income households continue to splurge.”
Middle-Income Americans Are Increasing Their Spending
According to an analysis of Bank of America credit and debit card data, middle-income households have been ramping up their spending since mid-2024.
There are several factors that could be attributed to this increase, according to the analysis. One is an improvement in wage growth. Bank of America data on after-tax wage growth for middle-income households shows that it was up an average of 3% year-over-year in February.
Another factor is the higher cost of living, which necessitates higher spending. This is particularly true for younger middle-income households, whose spending growth is largely being driven by the rising costs of living, such as housing.
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