#HighIncome #Households #Living #Paycheck #Paycheck
Key takeaways
- In 2024, 20% of households with incomes over $150,000 lived paycheck to paycheck, regularly spending more than 95% of their income on necessities, according to Bank of America.
- High-income families spend almost everything they earn because they typically buy larger, more expensive homes.
- As higher-income families purchase more expensive housing, housing costs have risen and will continue to rise until mortgage rates fall significantly.
More high-income families are living paycheck to paycheck as housing costs continue to rise.
Across all income levels, more families are living paycheck to paycheck, which a recent report from Bank of America described as regularly spending more than 95% of their income on necessities. In particular, families with incomes over $150,000 found themselves spending almost everything they earned this year.
Bank of America said higher-income families are under severe pressure because they have purchased larger, more expensive homes. This translates into higher insurance costs, property taxes, and utility bills.
A separate Bank of America report showed that families across income brackets are struggling to pay these expenses as climate change and inflation push up prices.
“This is essential spending we’re talking about,” said David Tinsley, chief economist at Bank of America. “So it’s not as if people have a choice here.” “Maybe they could take radical action and move to cheaper places, and work more jobs, but in any reasonable sense, they are stuck in this situation in the short term.”
According to the Consumer Price Index, home insurance has risen by 4.5% since the beginning of 2023, electricity bills have increased by 4.3%, water and garbage collection costs have risen by 8.5%, and property taxes have risen by 8.1%.
#HighIncome #Households #Living #Paycheck #Paycheck
