For a long time, the negative sentiment surrounding financial stability has been prevalent, but it appears to have intensified sharply in recent years.
A survey from Northwestern Mutual found that financial anxiety had reached a record high. In a Primerica survey conducted in March of middle-class households, half of the respondents described their financial situation as "not so good" or "poor."
For many in the middle class, inflation is at the core of this concern. In the Northwestern Mutual survey, 51% of respondents identified inflation as the biggest obstacle to financial security, while 67% of households in Primerica's survey said their income was not keeping pace with the cost of living.
This situation makes people feel excluded from many benefits traditionally associated with middle-class life. Seventy-four percent of middle-class Americans in Primerica's survey reported cutting back on nonessential spending. In a 2023 Redfield & Wilton survey for Newsweek, half of the Americans polled said they didn't plan on taking a summer vacation due to the higher cost of living.
Many are also dipping into their savings, which makes retirement seem uncertain. In the Primerica survey, 60% of Americans said they didn't believe they were saving enough for a comfortable retirement.
Additionally, 46% of middle-class Americans in that survey reported that they had either reduced or paused their savings, and 38% said they didn't think they could afford an unexpected expense over $1,000.
"Anxieties about things like owning their own home or going to college — all these things that most Americans see as indicators of middle-class status — many now don't think are attainable for them," said Sheehan.
Homeownership may be the most prominent example of the middle-class dream feeling out of reach, and this struggle is not just a perception but a reality.
With mortgage rates near a 23-year high and home prices at record levels, Americans now need to earn 80% more than they did before the pandemic to comfortably afford a home, according to a recent Zillow report. First-time homebuyers comprised less than one-third of all home purchases in 2023, one of the lowest shares ever recorded, according to the National Association of Realtors.
