A new survey from Santander US reveals that while many middle-income Americans feel optimistic about their financial trajectory, they continue to grapple with inflation, housing costs, and uncertainty surrounding tariffs.
The mid-June survey, conducted with Morning Consult and released Monday, found that 75% of middle-income Americans — those earning between $53,000 and $161,000 — believe they’re on the path to financial prosperity. However, more than 80% expect prices to continue rising, and nearly two-thirds of recent homebuyers reported living paycheck to paycheck.
Stephen Kates, a certified financial planner with Bankrate, said middle-income households are feeling the pressure. “Inflation has created a sentiment nightmare for most people who are just trying to pay bills and enjoy life,” he said.
Tariffs Fuel Accelerated Car Buying
Concerns over rising costs and potential tariffs are influencing consumer behavior, particularly among car buyers. The survey found that 55% of respondents are considering purchasing a vehicle — the highest figure Santander has seen in two years. Of those planning to buy within the year, 42% said they’re moving up their purchase timeline due to fears of higher costs linked to tariffs.
Kates said many buyers are acting now to avoid potentially steep price hikes. “They don’t want to be hit with an extra $5,000 to $10,000 on a car next year,” he said. Automakers are already feeling the effects — General Motors recently reported a $1.1 billion hit from tariffs last quarter. Cox Automotive has labeled tariffs a major obstacle to vehicle affordability.
Housing Costs and Shifting Views on Homeownership
Santander’s findings show that nearly three-quarters of recent homebuyers are cutting back on spending to manage homeownership expenses. At the same time, more than 60% of renters said renting is more affordable than buying, and many expressed comfort with long-term renting. Sixty percent of respondents said owning a home is no longer the primary indicator of financial success.
Cautious Confidence in the Labor Market
While 79% of respondents feel secure in their current jobs and three-quarters are current on their bills, the labor market is showing signs of cooling. The latest Job Openings and Labor Turnover Summary (JOLTS) report indicated a low firing rate of 1%, but a sluggish hiring rate of 3.3% — among the lowest in more than a decade. Economists say this reflects a pause in hiring rather than job losses.
Stephanie Guichard, senior economist at The Conference Board, noted that while unemployment remains low at 4.1%, workers are beginning to notice it’s becoming harder to find new employment opportunities.
Inflation Still the Top Concern
Despite easing slightly, inflation remains the primary financial worry. However, many middle-income Americans report being better equipped to handle higher costs now than they were a year ago. Over 80% have reduced spending, skipped travel, or dipped into savings to adjust. Recent wage growth outpacing inflation has helped some families begin to recover from pandemic-era price surges.
Santander said it focused on topics like homeownership, car buying, and inflation because they align closely with the financial products the company offers. The survey highlights both the resilience and ongoing vulnerabilities of America’s middle-income earners as they navigate a complex economic landscape.
