American families aren’t imagining it: we’ve had affordability problems since at least 2022.The situation was improving markedly throughout last year, right up until this February, but overseas conflicts reversed some of that progress.
Once the wars with Iran and in Ukraine conclude, affordability will start to improve again.The cost-of-living crisis started during the Biden administration when prices rose so much faster than earnings that people’s paychecks shrunk in terms of their purchasing power.Although the average American’s weekly paycheck grew roughly 17% during President Joe Biden’s term, it bought about 4% less.For many families, that meant canceling vacation plans or being unable to buy a newer vehicle.
For others, it meant having to put some necessities — like rent, prescriptions and food — on credit cards.Even when inflation came down, families were still facing high costs since inflation is the rate of price increases, not the prices themselves.DEMOCRATS SAY THEY'LL MAKE LIFE AFFORDABLE.
YOUR WALLET MAY DISAGREETo add insult to injury, 40-year-high inflation prompted the fastest rise in interest rates in just as long.Not only did prices rise rapidly, but so did borrowing costs.
That was a deadly one-two punch for homeownership affordability as higher home prices and mortgage interest rates combined to double the monthly payment on a median-priced home in just four years.Islamic Revolutionary Guard Corps (IRGC) speed boat is sailing along the Persian Gulf near a general cargo vessel.(Morteza Nikoubazl/NurPhoto via Getty Images) But affordability was improving after January 2025.
Real (inflation-adjusted) weekly paychecks rose roughly 2% on average from January 2025 through February of this year.While not a windfall, it was still good progress and reversed half the cumulative losses from the Biden years as income growth outpaced inflation.GEN Z IS WORKING HARD, BUT THE ECONOMY IS PUTTING THE AMERICAN DREAM OUT OF REACH FOR MANYTax and...