Four Profiles of Middle Class Households

December 8, 2017 | by Michael Wilt

Categories: Affordable Housing, Homeownership, Rental Housing

The term "middle class" carries a variety of meanings, and they are typically tied to the income a household earns. While there's no official definition of middle class, the Pew Research Center considers households earning between 67 percent and 200 percent of the median family income as middle class. Nationwide, that's an income range of $39,554 to $118,072 notes thebalance.com.

However, the income range only provides a partial picture of a middle class household. It doesn't take into account cost of living, median income in the area, or other factors that may affect a middle class household’s ability to afford their housing costs and other expenses. With that in mind, the Texas Standard recently posed the question, "what does 'middle class' really mean," and answered it by profiling middle class life in four Texas communities.

Here are those communities, ranked in order of most affordable to least affordable based on cost of living. We’ve also added data from city-data.com, the Real Estate Center at Texas A&M University, and the National Low Income Housing Coalition to provide a better snapshot of middle class households.

McAllen
Median Household Income: $43,062
Median Home Price: $153,600
Average fair market rent for a two-bedroom apartment: $734
​Annual income needed to afford a two-bedroom apartment: $29,360*
Cost of living index: 82.5**

Lubbock
Median Household Income: $48,103
Median Home Price: $152,750
Average fair market rent for a two-bedroom apartment: $789
​Annual income needed to afford a two-bedroom apartment: $31,560
Cost of living index: 84.9

Katy
Median Household Income: $73,013
Median Home Price: $310,000
Average fair market rent for a two-bedroom apartment: $976
Annual income needed to afford a two-bedroom apartment: $39,040
Cost of living index: 93.0

Dallas 
Median Household Income: $47,243
Median Home Price: $288,750
Average fair market rent for a two-bedroom apartment: $1,031
​Annual income needed to afford a two-bedroom apartment: $41,240
Cost of living index: 94.1

Because incomes, housing affordability, and cost of living vary depending on where you live, there's no one size fits all approach to affordable housing. You may have noticed that we ask where you are purchasing a home when you take our eligibility quiz to determine if you qualify for our home buyer programs. That’s because the income limits are based on each county’s area median income.

It's also why we use area median income to determine who qualifies for housing created through our developer financing programs. That way, we are taking into account the varying nature of incomes from area to area. 

*"Afford" means spending no more than 30% of gross income on gross housing costs.
**The lower the number, the less it costs to live in a city.

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On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.