These 4 Milestones Used To Define the Middle Class - Now Millions Can't Reach Them

Millions of Americans feel as though traditional markers of financial stability are moving further out of reach. The share of people living in middle-income households, for instance, has declined from 61% in 1971 to 51% in 2023, according to Pew Research Center.

If you are unhappy about where you stand financially, you are not alone. Many Americans feel the cost of the following basic milestones has outpaced their wage growth significantly.

What the shrinking middle class really means

Before we get into the numbers, it is important to look at some context.

While it is true that the middle class is shrinking, that fact is not necessarily bad news for everyone, or even for society at large.

Part of the reason the middle class is shrinking is that more folks are joining the upper class. In fact, Pew notes that since 1971, more people have moved from middle class to upper class than fell from middle class to lower class.

The share of upper-income households grew substantially over the period, from 11% to 19%. As Pew notes, "In that sense, these changes are also a sign of economic progress overall."

However, the share of lower-income households also grew a bit, from 27% to 30%. For these folks, progress has been elusive.

In addition, Pew also stresses that since 1970, the growth in income for the middle class has lagged the growth rate for upper-class households. The share of total income that the middle class holds also has tanked since that time.

Here are milestones some people in the middle and lower classes now struggle to achieve.

Owning a home

Perhaps nowhere is the financial struggle of some people more evident than in their attempts to buy homes.

The median price of new homes sold in the first quarter of 2012 was $238,400, according to the Federal Reserve Bank of St. Louis. By the fourth quarter of 2022, prices had jumped to a record high of $442,600.

Of course, home prices have always risen over long periods. However, the jump in home values has been especially large since 2020. That has put homes out of reach for many in the lower and middle classes.

There is a glimmer of hope: Home prices have been gradually falling for several years now. By the first quarter of 2026, they had fallen to a median $403,200.

Getting married

The very act of getting married is now substantially more expensive than in the past. The average wedding now costs a staggering $34,200, according to The Knot 2026 Real Weddings Study.

In addition, millions of young couples are drowning in student loan debt. By the first quarter of 2026, student loan debt had reached $1.66 trillion. The average person with a bachelor's degree owes $29,560 in such debt.

When you combine the cost of a wedding day with student loan debt, credit card debt, and auto loan debt, it's easy to see why some people are reluctant to marry today.

Having kids

Raising kids has always been costly. Countless couples have decided that the expense is a bargain, however, as the joy of having a child outweighs the financial cost.

However, there is no sugar-coating the reality that kids can blow your budget sky high.

In 2026, the cost of raising a child from birth to age 18 is $303,418, according to a LendingTree study. The inflation that has taken hold throughout the economy means that number is up almost 28% in just three years.

The cost of raising a child rose 150% between 2000 and 2025, while wages grew 112% over the same time, according to Investopedia.

Buying a car

The lockdowns that surrounded the COVID-19 pandemic crushed the world's supply chain. That helped to send car prices much higher.

Tariffs and the general inflationary trends throughout the economy also have contributed to higher car costs.

Even if you try to save money by purchasing a used car, you are likely in for some sticker shock. The price of a used car up to 8 years old has jumped nearly 28% since 2020, according to JD Power.

Why these milestones feel less affordable

As prices have increased, Americans are feeling the heat. Americans now believe they need $1.46M to retire comfortably, up $200,000 from last year, according to a Northwestern Mutual survey.

The middle class appears to be shrinking fastest in coastal metros while Midwest and rural areas remain more accessible.

Again, it's important to note that in many cases, a shrinking middle class equates to more people moving up the economic ladder, not down it.

Still, it is undeniable that some folks are seeing their fortunes turn south, and that financial insecurity is driving them to delay or skip major milestones entirely.

How to strengthen your financial position

The challenges facing millions in the lower and middle class are real and daunting. But everyone can improve their fortunes.

In some cases, the fixes are easy. Nobody has to spend $34,000 on a wedding, for instance.

In other situations, you may need to make more difficult moves, such as returning to school and retraining for a more lucrative career.

Fortunately, many other fixes are easily available to everyone. They include:

• Creating a budget and trimming back on unnecessary spending
• Building an emergency fund
• Avoiding lifestyle inflation
• Boosting income through a part-time job or side hustle

Bottom line

The middle class now represents a smaller share of Americans than it did five decades ago. Although some people have moved into the upper-income tier, rising costs continue to make homeownership, marriage, parenthood, and car ownership harder for many households.

If your fortunes have turned south, know that there are steps you can take to crush your debt, boost your income, and get back on your feet again.

You May Also Like

$200 Bonus + Up to 5% Cash Back

Earn a $200 bonus after spending $500 on purchases in your first 3 months from account opening. Member FDIC

SPONSORED

7 Ways To Get Money Without Getting A Second Job

By FinanceBuzz Editors

How To Save Money on Car Insurance: 12 Ways to Lower Rates

By Elyssa Kirkham

10 Things Seniors Born Between 1941-1969 Could Take Advantage Of

By FinanceBuzz Editors

19 Dumbest Things Smart People Waste Money On

By Team FBZ

7 Moves If You Want to Stop Living Paycheck to Paycheck

By FinanceBuzz Editors

7 Clever Ways to Crush Your Debt

By FinanceBuzz Editors

Up To 5% Cash Back

Discover it^® Cash Back

Benefits Card Details

• $0 annual fee
• Intro APR on purchases and balance transfers
• Apply Now

• Get a 0% intro APR for 15 months on purchases and balance transfers; balance transfer fee applies. Then 17.49% to 26.49% Standard Variable Purchase APR applies, based on credit worthiness
• INTRO OFFER: Unlimited Cashback Match for all new cardmembers. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300
• Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases
• Redeem cash back for any amount. No annual fee
• Terms and conditions apply

4.7

FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.

Apply Now

on Issuer's secure website

Rates and fees

Read Card Review

Intro Offer

INTRO OFFER: Unlimited Cashback Match for all new cardmembers. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300

Annual Fee

$0

+ -

Why we like it

• The Discover it^® Cash Back is ideal for anyone who loves flexible rewards options.

• Cardholders can redeem their cash back for any amount.

• Earn 5% cash back on rotating bonus categories up to the quarterly maximum when you activate, along with 1% cash back on all purchases. Categories may include places like gas stations, grocery stores, restaurants, and more.

• Apply Now

---

Subscribe Today

Learn how to make an extra $200

Get vetted side hustles and proven ways to earn extra cash sent to your inbox.

or

Subscribe Now →

By submitting this form you agree to receive emails from FinanceBuzz and to the privacy policy and terms