About this Video

• Video Title: $150,000 is Considered Middle Class in 2025
• Channel: Humphrey Yang
• Speakers: Humphrey Yang
• Duration: 12:32

Introduction

This video explores the controversial idea that a $150,000 annual salary can still be considered middle class in 2025. The speaker analyzes various factors contributing to this phenomenon, including wage growth, housing costs, and geographic disparities.

Key Takeaways

• Wage stagnation: While wages have increased, the growth has been offset by rising costs of essentials like housing, food, and transportation.
• Housing affordability crisis: The home price-to-income ratio has significantly increased, making homeownership significantly more challenging for middle-class families. A $150,000 salary may not be enough to afford a median-priced home in many areas, especially considering down payment requirements and mortgage payments.
• Geographic disparity: The cost of living varies greatly across the United States. A $150,000 salary can provide a comfortable lifestyle in some areas but barely cover expenses in high-cost-of-living regions.
• Subjective perception of class: Many people self-identify as middle class regardless of their actual income, potentially due to downplaying their financial status or inaccurate self-assessment.
• Strategies for financial improvement: The speaker suggests several strategies to improve financial well-being, such as carefully managing spending, comparing insurance offers, negotiating lower prices for services, and investing regularly (e.g., in a Roth IRA). Switching jobs for a higher salary is another option mentioned.

1. According to the video, the Brookings Institution data shows an annualized growth rate of 0.45% for average hourly earnings and 1.31% for total compensation from Q4 2019 to Q1 2025.

2. As of Q1 2025, the median home price in the US was $416,900. The median down payment was $54,310, representing approximately 13% of the median home price, according to Bank Rate.

3. The speaker estimates a monthly mortgage payment of around $2750 for a median-priced home. To meet the 28% rule for mortgage qualification, a gross monthly income of $9,821 (or approximately $117,852 annually) is needed.

4. The speaker contrasts San Francisco, where a $150,000 salary is insufficient to afford a median-priced home (even with a 20% down payment), with Kansas City, where the same salary would allow for a more comfortable home purchase and mortgage payment well within the 28% rule. This highlights the significant impact of geographic location and cost of living on purchasing power.