The affordability crisis is primarily a result of price increases in five major sectors of consumer spending: housing, food, health care, child care, and energy. In none of those sectors are tariffs a significant factor. In fact, there are pretty clear drivers of the price increases in each of those sectors, and they are all primarily domestic causes and issues. The common theme is that the inflation of 2021-2022 raised prices by a cumulative total of some 20 percentage points, but it did more than that. It threw supply and demand out of whack in some key sectors of the economy and we are still struggling to adjust, in other words to bring supply and demand back into balance, hopefully at something approximating the previous price levels.

I call these five categories of goods and services the “Unaffordability Five.” It’s worth looking at them in greater detail because examination of the dynamics of each market shows how hard it will be to return to the halcyon pre-pandemic days.

Table 1 below shows that since 2019, household incomes are up 21.9%. However, the consumer price index (CPI) rose 29% in the period from January 2019 to September 2025, the latest monthly data available at the time of writing. So the median household has lost about 7 percentage points of purchasing power in those 5 2/3 years.

But when we look at the “Unaffordability Five” the situation looks much worse. These are all essential and high-profile purchase categories for most individuals and families.

Shelter, the statisticians’ term for both rent and the cost of servicing the mortgage for homeowners, rose 33.9% over this period, 12 points more than median household incomes. Higher long-term interest rates have raised the cost of mortgages. Rents have been rising for years, as the millennial and Gen Z generations crowd themselves into popular big cities which are mainly on the east and west coasts.

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