Falling Behind Neighbors 

In our previous insights post, we found that inflation is outpacing the wage gains of the low-income families MAF serves, making it increasingly difficult for them to get by. But keeping up with rising prices is only one measure of a household’s financial well-being. Another is how families are faring relative to their surrounding communities and local economies.

To track how the gap between MAF’s clients and their neighbors changed over time, we turned to HUD’s Area Median Income (AMI) measure. Comparing our clients’ income to their local AMI shows how much they earn relative to the median income in their community.

The Expanding Divide

Between 2016 and 2024, 4 in 5 of MAF’s Lending Circle applicants earned less than 80% of their local AMI.

While this aligns with MAF’s mission to serve lower-income households, the concerning finding is that MAF’s clients have fallen further behind their neighbors over the past decade despite earning more on paper. In other words, MAF’s clients are seeing their incomes grow at a much slower pace than their neighbors. 

In 2016, the median MAF client household earned $36,000 annually, which is roughly 54 cents for every dollar earned by the median household in its community. By 2024, that income had risen to $46,000. However, the median MAF household was now earning just 41 cents for every dollar earned by their median neighbor. This pattern is consistent across the country: whether in the Bay Area, Chicago, Houston, or anywhere else MAF households are, they are experiencing similar declines relative to their neighbors.

This trend is not driven by demographic changes in MAF’s client base. As discussed earlier in this insights series, the real income distribution of Lending Circle applicants has remained largely consistent over time. Instead, the data reveal unequal income growth between the low-income households that MAF serves and the communities where they live during a period of strong economic growth. Put plainly, economic growth has not translated into shared prosperity for MAF’s clients.

The Gap Felt at Home 

As the households MAF serves experience slower income growth than their communities, economic pressures like inflation hit them especially hard. Adriana, a MAF client, described that reality this way:

“It’s very difficult to manage your finances when, no matter how hard you try, you can’t make ends meet, and it keeps happening, and then you go to your son’s soccer team and you see all the other parents so relaxed.”

Adriana’s experience illustrates the disproportionate financial strain many low-income families face. As local economies grow and incomes rise, the benefits often accrue disproportionately to households that already have financial resources. Meanwhile, low-income families like Adriana’s, who typically lack those same financial buffers, struggle to keep pace with the rising cost of living. Over time, this dynamic exacerbates economic disparities, a pattern evident in MAF’s data.

The Cost of Falling Behind

The consequences of being left behind are not only financial. They shape how parents see themselves, the choices they make for their children, and the stress they carry every day.

Reflecting on his son’s soccer games, Rodrigo shared:

“When the game ends, the other families go out to eat together, and my son asks if I can take him too. I have to tell him no. He doesn’t get upset because he understands, but he shouldn’t have to go through that.”

Rodrigo’s words capture something economic data rarely does: the emotional cost of falling behind. When families repeatedly find themselves unable to participate in the same experiences as those around them, the gap between them and their peers carries a heavy emotional weight that extends well beyond the financial. Their sense of belonging erodes, and the constant mental effort of weighing tradeoffs and stretching every dollar leaves less energy for planning, focusing at work, and being present with loved ones. These costs don’t show up in income statistics, but they profoundly shape daily life.

Expanding Financial Possibilities

As local economies grow, low-income households like the ones MAF serves are not experiencing the same gains as the communities around them. Instead, they are falling further behind, making it harder to build financial stability and participate fully in everyday life. Without intervention, persistent inflation will widen that gap. 

That’s why MAF designs financial products and services that recognize families’ strengths, respond to their realities, and expand financial possibilities. Learn how your organization can partner with MAF to help families in your community build stronger financial futures.