Affordability is a buzzword right now — these charts show why
People shop at a grocery store in Brooklyn on December 12, 2025 in New York City.
Spencer Platt | Getty Images News | Getty Images
Affordability has become a source of household frustration and a major focus of political discourse in recent months as prices for everyday goods and services continue to rise.
“People are screaming about affordability,” said Martha Gimbel, managing director and co-founder of the Yale University Budget Lab. “I think this has very clearly become a political flashpoint,” he said.
The inflation rate has fallen from its peak in 2022, when it reached 9.1 percent, the highest level in nearly 40 years, as measured by the annual consumer price index. In November 2025, this rate was 2.7%.
However, the daily prices paid by consumers are much higher than before the Covid-19 outbreak. The CPI, which measures how fast prices are rising for a range of goods and services, has risen 26 percent in the past six years.
In other words: The inflation rate has risen by nearly twice the Federal Reserve’s optimal rate since the 4th quarter of 2019, according to Moody’s chief economist Mark Zandi.
But prices for many products that are consumer staples or affect overall quality of life are rising even faster, economists said.
This applies to categories such as housing, groceries, utilities, dining out, car repair and used cars, according to CPI data.
Businesses generally do not reduce prices; Therefore, according to economists, even though inflation slowed down, prices increased in absolute terms.
“In recent years, wages have been above inflation, our living standards are slightly higher than before,” Gimbel said. “On the other hand, it is also true that certain spending categories are more emotional for people,” he said.
A University of Michigan survey published in December found that high prices remain a pain point for consumers. About 46% blame high prices for their poor personal financial situation; This ranks among the highest since the series began in the 1970s.
Views on affordability among Republicans and Democrats
But he said affordability was also affected by the “broken” political climate.
For example, Politico’s poll shows a wide gap in perceptions between Democrats and Republicans.
Nearly 82 percent of those who voted for former Vice President Kamala Harris in the 2024 presidential election said their cost of living had worsened in the past year, according to the survey. Meanwhile, 45 percent of those who voted for President Donald Trump said the same thing.
Trump earlier this month In a speech in Pennsylvania, he said affordability was “a scam.”
However, he also floated the idea of sending a $2,000 duty “dividend” to many households; Economists say the move could increase inflation and worsen affordability. Trump addressed the nation in a televised prime-time address last week, announcing that the government would send a $1,776 “warrior dividend” check to every U.S. service member before Christmas.
Democrats have rode the affordability issue to victory in recent elections, including the mayoral race in New York and the gubernatorial elections in New Jersey and Virginia.
Those election victories — along with other factors such as tariffs imposed this year — have brought Americans’ focus back to affordability after a period of moderating inflation, Zandi said.
“What made this stand out were the special elections that showed very clearly that people were voting on this issue,” he said. “And I think that’s what pushes this to the top of political discourse.”
Why will affordability continue to be at the forefront?
Affordability may continue to be a top concern heading into 2026.
Enhanced premium subsidies for 22 million Americans enrolled in health insurance through the Affordable Care Act marketplace It’s poised to disappear by the end of 2025, causing insurance premiums to more than double for the average buyer.
High prices aren’t the only reason for affordability
High prices since the Covid-19 pandemic are the byproduct of many factors.
According to economists, the mismatch between supply and demand caused high prices to rise rapidly.
The government has pumped trillions of stimulus dollars into the U.S. economy to support household spending, and consumer demand has exploded as the economy generally reopened in early 2021; Meanwhile, the Covid-19 health crisis has clogged supply chains and limited supply to meet this demand. Businesses rushed to rehire workers by increasing wage growth and prices, especially in service-oriented industries.
Vehicles being repaired at an automotive shop in Oklahoma City, Oklahoma, on December 12, 2025.
Nick Oxford/Bloomberg via Getty Images
Russia’s invasion of Ukraine in 2022 It pushed energy and food prices even higher. Zandi said recent tariffs have put upward pressure on prices and “reignited” the affordability narrative.
But Zandi said high prices are just one factor fueling sentiment around affordability.
Jobs, wages and household balance sheets, including assets and liabilities, also fuel sentiment, he said.
The job market has generally cooled, unemployment has increased, and businesses are reluctant to hire. Zandi said interest rates have dropped but are still quite high for credit cards and auto loans, while mortgage rates remain above 6%.
I think this has clearly become a political flashpoint.
Martha Gimbel
executive director and co-founder of the Yale University Budget Lab
As stock prices rose, these riches largely flowed to high-income households, which held a disproportionate share of these assets.
There was also a wage increase fell faster It’s higher for lower-wage workers than for those earning higher incomes, according to data compiled by the Federal Reserve Bank of Atlanta.
“Not all Americans are feeling the affordability crunch,” Zandi wrote in November. “The financial situation of the rich is arguably better than ever.”
But Gimbel said households feeling this squeeze shouldn’t necessarily despair.
“We can solve these problems,” he said. “But it takes time, and people need to feel that you are listening to them and taking them seriously.”
