5 States Where It’s Easiest To Become Middle Class in 2025
Mississippi
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Average cost of living: $4,451
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Homeownership rate: 75.5%
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Average rent: $1,317
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Average 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 average selling price of a home in the state was around $188,641, which is much lower than the national average of $363,932.
South Dakota
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Average cost of living: $4,417
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Homeownership rate: 69.3%
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Average rent: $1,175
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Average household income: $95,050
“The cost of living is low, housing prices are affordable, and there’s no income tax,” said Musson. “The average income in the state is relatively low, but there are several thriving economic centers where it is possible to earn a higher income.”
With affordable rent and higher homeownership rates, it’s easier to get into a middle-class lifestyle in South Dakota than in many other states.
Middle Class Considerations
If you’re looking to relocate to a different state to live a middle-class lifestyle or to improve your quality of life, there are a few considerations that you can’t ignore outside of just housing prices.
You Have to Factor In Hidden Costs
“States with no income tax create short-term cash flow gains but often impose punishing hidden levies,” said Cummings. “Texas, Florida, and Tennessee advertise themselves as tax havens, but the absence of an income tax is offset by aggressive property and consumption-based taxes.”
You should remember that, although you can keep more of your paycheck in these states, you may end up spending more on insurance premiums. Cummings pointed out that insurance premiums in Florida can easily exceed $5,000 annually due to hurricanes, which would bring up your overall housing costs. This means that you’ll want to run all of the numbers before relocating your family.
You Should Review Wages and Expenses
“California’s average household income exceeds $95,000, but average rents in Los Angeles now surpass $2,800 per month, erasing wage gains,” said Cummings. “Meanwhile, Iowa’s $70,000 average income appears 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 state with a higher income, you have to factor in the higher expenses that come with it, which could hurt your ability to enjoy a middle-class lifestyle. You’ll want to compare the 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 gone up significantly. You’ll want to ensure that you can afford the housing costs relative to your income in the new state before making the move.
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This article originally appeared on GOBankingRates.com: 5 States Where It’s Easiest To Become Middle Class in 2025
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