According to the Pew Research Center’s analysis of government data, 61% of American households lived in middle-class homes. A previous article on GOBankingRates determined that the income range for the middle class was between $56,600 and $169,800.
Read more: Billionaire says it is impossible to synchronize the market; This is what you should do instead.
Find out: Mark Cuban tells Americans to stock up on supplies as Trump’s tariffs rise – here’s what to buy
However, the ability to live a middle-class lifestyle cannot be based solely on your income, as each geographic region has a different cost of living. Some of the key considerations included favorable tax policies, average cost of living, homeownership rates, average household income, average rent and other financial factors. The average cost of living was obtained from Livingcost.org for a family of four. Median monthly rent was derived from RentCafe, homeownership rates were derived from Visual Capitalist, and median household income was derived from Income By Zipcode.
GOBankingRates spoke with financial experts to find the states where it will be easiest to reach the middle class in 2025 if you’re thinking about moving.
-
Average cost of living: $5,755
-
Home ownership rate: 67.3%
-
Median income: $1,984
-
Median household income: $102,130
“Florida and Texas have no state income taxes and have a moderate to low cost of living depending on location (rural areas are cheaper than cities),” said Chad D. Cummings, CPA and CEO of Cummings & Cummings Law. Florida made this list because you can keep more of your income and find affordable housing if you choose to live in a rural area of the state.
Find out below: 5 Ways You Can Reduce Your Tax Bill Like a Millionaire, According to Robert Kiyosaki
-
Average cost of living: $4,905
-
Home ownership rate: 63.6%
-
Median income: $1,458
-
Median household income: $106,819
With a median home value of $298,906, Texas makes the list because you can maintain a middle-class lifestyle by purchasing a home in a rural area and keeping more of your salary.
-
Average cost of living: $5,037
-
Home ownership rate: 68.9%
-
Median income: $1,537
-
Median household income: $93,479
“Tennessee has a strong economy with many great job options and career growth opportunities,” said Melanie Musson, Quote.com financial expert. “Homeownership in the state is higher than the national average and there is a wide range of average home prices, depending on where you live.”
It is worth noting that in 2024, 65.7% of American households owned their home, and the figure was 68.9% in Tennessee.
-
Average cost of living: $4,451
-
Home ownership rate: 75.5%
-
Median income: $1,317
-
Median household income: $76,955
Cummings noted that Mississippi’s low housing prices and average rent make the state favorable for a middle-class lifestyle due to the low cost of living. According to Zillow, the median home sales price in the state was around $188,641, which is much lower than the national average of $363,932.
-
Average cost of living: $4,417
-
Home ownership rate: 69.3%
-
Median income: $1,175
-
Median family income: $95,050
“The cost of living is low, housing prices are affordable and there are no income taxes,” Musson said. “The median income in the state is relatively low, but there are several thriving economic centers where higher incomes are possible.”
With affordable rents and higher homeownership rates, it’s easier to adopt a middle-class lifestyle in South Dakota than in many other states.
If you’re looking to move to another state to live a middle-class lifestyle or improve your quality of life, there are some considerations you can’t ignore besides housing prices.
“States that have no income taxes create short-term cash flow gains, but often impose punishing hidden levies,” Cummings said. “Texas, Florida and Tennessee are advertised as tax havens, but the absence of an income tax is made up for by aggressive property and consumption taxes.”
You should remember that although you may keep more of your paycheck in these states, you may end up spending more on insurance premiums. Cummings noted that insurance premiums in Florida can easily exceed $5,000 a year due to hurricanes, which would raise overall housing costs. This means you’ll want to do all the numbers before moving your family.
“California’s median household income exceeds $95,000, but median rents in Los Angeles now exceed $2,800 per month, erasing wage increases,” Cummings said. “Meanwhile, Iowa’s median income of $70,000 seems modest, yet mortgage payments on a $200,000 home consume less than 20% of gross income.”
While it may be tempting to move to a higher-income state, you have to take into account the higher expenses that come with it, which could hurt your ability to enjoy a middle-class lifestyle. You’ll want to compare income and expenses in the state before deciding to move.
GOBankingRates determined that with inflation and the cost of living skyrocketing, the dividend line that defines the American middle class has increased significantly. You’ll want to make sure you can afford housing costs relative to your income in the new state before you move.
More GOBankingRates Content
This article originally appeared on GOBankingRates.com: 5 States Where It Will Be Easiest to Become Middle Class in 2025
