Some Gen Zers can't believe a $74,000 salary is considered 'middle class'

Angle down iconAn icon in the shape of an angle pointing down. "It would take you years to save up the $30,000 you would need for a down payment," TikTok realtor Freddie Smith explained. DenisKot

• A recent Newsweek survey found Gen Z doesn't consider a $74,850 salary "middle class."
• TikTok realtor Freddie Smith said that for many, home ownership has become a distant dream.
• "100k is the new 45k," one viewer agreed.

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An Orlando-based realtor has sparked a viral conversation on TikTok after sharing a study that concluded Gen Z doesn't consider a $74,850 annual salary "middle class," even though the figure was considered sufficient for previous generations.

In his video with 8 million views, Freddie Smith cited a Newsweek survey conducted last month among 1,500 participants. Only 41% of Gen Z respondents considered a $74,850 salary to be "middle class," while millennials (50%), Gen Xers (61%), and Baby Boomers (73%) were more likely to agree with the premise.

The $74,580 figure falls squarely in the middle of $38,133 and $114,400 — a range defined as middle class by Pew Research Center, according to Newsweek.

Even still, Smith posited that $74,000 is much higher than the average Gen Z salary. (A SmartAsset analysis of Bureau of Labor Statistics data from the third quarter of last year found the median salary of a 25-to-34-year-old in the US was $52,156.)

Smith then broke down the theoretical monthly expenses for a "financially responsible" Gen Zer, pegging monthly take-home for that range at roughly $4,300 after taxes, health insurance, and 401K investments.

Smith then factored in rough estimates for rent ($1,400 on a shared apartment in a mid-sized city), groceries ($600), and other expenditures like student loans, car payments, phone bills, and leisure money. At the end of the month, the average Gen Zer would be left with about $650 — a meager sum that would make home ownership a distant dream, Smith said.

"It would take you years to save up the $30,000 you would need for a down payment on a house with the closing cost," he explained.

Furthermore, to be considered for a $400,000 loan, a homebuyer would need to make at least $120,000 per year, Smith said. (The average sale price for a home last November was $488,900, per the U.S. Census Bureau.)

A housing market in low supply coupled with high interest rates has priced out the average American from buying a home, Smith told Business Insider.

He added he believes housing, college, and daycare costs are the three biggest factors in "moving the middle class goalpost," estimating that someone starting out their life today would need to make between $120,000 and $150,000 today "to be considered middle class."

Commenters on TikTok shared his dismay — with some bemoaning what they felt were rising living costs. "100k is the new 45k," one wrote. "23 and making 73k, reflect on this often," another viewer shared. "My dad raised 3 kids on a bit over 70k, has a house and we took vacations every year…real bummer to think about."

This isn't the only study to illuminate Gen Z's rising expectations around salary. Another from last year concluded that Gen Zers need to make $125,000 annually to feel like they've "made it" — though some interviewed by Business Insider disagreed after factoring in expenses like childcare and housing.