Are U.S. Households Feeling the Squeeze? A Look at Consumer Affordability

Across the United States, millions of households are asking the same question: why does everything still feel so expensive? On paper, the economy looks solid. Unemployment remains near record lows, inflation has cooled, and consumer spending hasn’t collapsed. Yet for most Americans, it doesn’t feel like relief has arrived. The grocery bill is still higher than it used to be. Rent keeps climbing. And even with a steady paycheck, there’s less left at the end of each month. The affordability crisis of 2025 isn’t about joblessness or economic collapse—it’s about stagnation. Wages are rising slower than prices, and the safety nets meant to catch those falling behind are starting to fray.

According to the U.S. Census Bureau, the real median household income in 2024 was $83,730, almost unchanged from $82,690 in 2023 and only marginally above the pre-pandemic level. That means, after adjusting for inflation, household purchasing power has barely improved in five years. The national unemployment rate sits around 4.3%, signaling a strong labor market, but the gains haven’t been shared equally. Data from the Bank of America Institute shows that higher-income earners have seen roughly 4% wage growth over the past year, compared to 2.4% for middle-income households and just 1.4% for lower-income workers. In short, the people most affected by rising costs are getting the smallest raises.

While inflation overall has cooled, the cost of essentials continues to rise. The Bureau of Labor Statistics reports that grocery prices—“food at home”—rose 2.7% between September 2024 and September 2025, while “food away from home,” which includes restaurant and take-out meals, climbed 3.7%. Two-thirds of Americans told Pew Research Center they are very concerned about the cost of food. Even as inflation rates fall, the sticker shock at checkout has barely eased, forcing families to rethink weekly shopping lists and cut back on non-essential purchases. For many, the rising cost of food has become the most visible and exhausting sign of inflation that refuses to fade.

The situation is even more severe when it comes to housing.

According to the Harvard Joint Center for Housing Studies, more than half of U.S. renters now spend over 30% of their income on housing, while 27% are severely cost-burdened—spending more than half their income just to keep a roof over their heads. Among renters earning less than $30,000 a year, the numbers are staggering: 83% are cost-burdened and 67% are severely so. For potential homebuyers, affordability continues to worsen. The National Association of Realtors reports that only 8.7% of homes listed in early 2025 were affordable to households earning $50,000 annually, down from 9.4% last year. Since 2015, median rents have surged 54%, far outpacing both inflation and wage growth. Housing, once a foundation of financial stability, is now one of the biggest sources of stress for the American middle class.

As if that weren’t enough, the situation for millions of low-income Americans is being made worse by uncertainty around government food assistance. The Supplemental Nutrition Assistance Program (SNAP), which supports over 41 million people nationwide, is facing funding risks due to ongoing budget disputes in Washington. The Food Research & Action Center reports that four out of five SNAP recipients already say their monthly benefits aren’t enough to cover their food needs. If federal funding lapses, millions could lose an average of $290 per month in assistance—money that often makes the difference between getting by and going hungry. A report from Time Magazine highlighted families preparing to skip bills or cut back on meals if benefits are delayed, while economists warn that for every $1 cut from SNAP, roughly $1.50 in consumer spending disappears from the economy. Analysts estimate that prolonged benefit disruptions could trim 0.5% off U.S. consumer spending—a ripple effect that would hit grocery stores, small retailers, and local economies hardest.

The result is a fragile kind of stability. Americans are employed, but they’re stretched thin. Inflation is cooling, but affordability is not improving. Real wages are stagnant, food and rent continue to climb, and government safety nets are under political pressure. Even a small disruption—a missed paycheck, a late benefit payment, or a rent hike—can now push families from stable to struggling. The illusion of economic health hides a simple truth: many households are surviving, not thriving.

Looking ahead, the outlook for consumer affordability depends on two critical factors: whether wage growth can finally outpace inflation, and whether policymakers can stabilize essential support programs like SNAP. If incomes begin to rise more broadly and housing supply expands, families could regain some financial breathing room. But if costs remain sticky and federal support weakens, the strain will deepen. For now, 2025’s economic story is one of paradox: an economy that looks strong from the outside, but feels fragile from within. The American household remains the engine of this economy—but for millions, it’s running on fumes.