The affordability crisis has Americans feeling every penny that leaves their wallets. And according to the U.S. Bureau of Labor Statistics, nearly half of their spending is going towards necessities like housing and food\u2014leaving little for quality of life.<\/p>\n
New data from the BLS\u2019s annual Consumer Expenditures Report found<\/a> that housing and food accounted for 46.9% of average expenditures in 2025. And that\u2019s because the pressure point of rising costs of essentials grew\u2014housing expenditures climbed 5.8% and food spending increased 4.6% compared to the previous year.<\/p>\n The increase in spending on housing and food was particularly pronounced in housing. The average household spent $27,790 on housing in 2025, up from $26,266 in 2024. Within housing costs\u2014which includes costs related to the housing itself, utilities, furnishings, supplies and operations\u2014shelter costs rose even steeper. Average shelter expenditures increased 8%, rented dwellings climbed 10.8% and expenditures on owned dwellings increased 7.3%.<\/p>\n Food spending also rose\u2014the average consumer spent $10,633 on food in 2025, up from $10,169 the previous year. The increase was partly driven by an 11.7% jump in spending on meat, poultry, fish and eggs.<\/p>\n Meanwhile, consumer inflation\u2014as based on the Consumer Price Index for All Urban Consumers\u2014increased<\/a> 2.6% in 2025, all while housing and food expenditures grew faster.\u00a0<\/p>\n And that disconnect between finances and affordability has carried over into 2026\u2014which is visible in the consumer sentiment.<\/p>\n The University of Michigan\u2019s October consumer sentiment index sat<\/a> at 48.0, showing minimal change from September\u2019s 48.1\u2014but 10.4% lower than its October 2025 reading of 53.6. The current economic conditions index also fell to 46.7 from 50.9 the previous month, a decline of 8.3%.<\/p>\n The October reading was the second<\/a>-lowest in the survey\u2019s history, following<\/a> a record low of 44.8 in May.<\/p>\n Joanne Hsu, director<\/a> of the University of Michigan\u2019s Surveys of Consumers and a UM economist, said purchasing power continued to dominate Americans\u2019 views of the economy.<\/p>\n \u201cThis month\u2019s decline in the Current Conditions subindex was driven entirely by buying conditions for durable goods, which plunged 18% on the basis of higher interest rates and rising concerns about the affordability of such purchases,\u201d Hsu said in a university press release<\/a>. \u201cPurchasing power continues to dominate consumer views of the economy. Sentiment is now 10% below a year ago and 15% below February, just prior to the Iran conflict.\u201d<\/p>\n 2025 woes continue in 2026<\/p>\n The spending pressures documented in the BLS report haven\u2019t disappeared in the new calendar year. According to The Urban Institute\u2019s October tracker, 49% of people in American families lacked<\/a> the resources to cover the true costs of essential expenses and live securely in their communities.<\/p>\n \u201cAffordability has become a central issue in American political discourse and in the everyday lives of millions of Americans struggling to get by and get ahead,\u201d the report read<\/a>. \u201cPolitical candidates as diverse as President Trump in 2024 and New York City Mayor Mamdani in 2025 focused on the high cost of necessities in their campaigns. The issue resonates with the public\u2014as nearly four out of five Americans are pessimistic about economic conditions improving in 2026.\u201d\u00a0<\/p>\n Housing remained a particularly significant source of pressure. According to the institute, renters are paying about $710 more per month for housing than they did in 2017, while families with two young children face an additional $6,600 in annual childcare costs compared with a decade earlier.<\/p>\n And according to a Pew Research Center survey carried out between July and August, 44% of U.S. adults experienced<\/a> at least one financial hardship from medical care, daily transportation costs, rent and mortgages, or food from a food bank or pantry. Among lower-income adults, that figure reached 71%, compared to 39% of middle-income adults and 13% of upper-income adults.<\/p>\n Higher expenses, lower incomes<\/p>\n