I hear a lot in the news about an “affordability crisis” these days. I’m somewhat skeptical about that term because I’ve lived my whole life in an affordability crisis. I don’t ever remember a time where I was flush with cash and the cost of living wasn’t a consideration. Nor was that the case when I was growing up. It’s always been a battle to pay the bills. If that’s changed for someone, well, I was never fortunate enough to be part of the group that didn’t have to worry about finances. Consider yourself lucky if you once were.
Setting that bigger discussion aside, I wanted to investigate the idea that housing costs are making life in the US unaffordable. To do that, I looked up the BEA personal consumption expenditures data. I pulled out three categories: total personal consumption expenditures; housing, utilities, and fuels; and furnishings, household equipment, and routine household maintenance. I then computed the share of the sum of the second and third categories as a function of the first. Here’s what I found for various years:
| Year | Housing as % of expenditures |
|---|---|
| 1960 | 26% |
| 1970 | 24.8% |
| 1980 | 25% |
| 1990 | 23.9% |
| 1998 | 23.4% |
| 2000 | 23% |
| 2005 | 23.2% |
| 2010 | 23.2% |
| 2014 | 22.3% |
| 2015 | 22% |
| 2019 | 21.9% |
| 2020 | 23.4% |
| 2021 | 22.2% |
| 2022 | 22.2% |
| 2023 | 22.2% |
| 2024 | 22.3% |
| 2025 | 22.3% |
What I see is that if you go way back in time, a much higher percentage of consumption expenditures went to housing. That steadily declined from 26% in 1960 to 21.9% on the eve of the pandemic. Then the percentage shifted back to level of 1998 in 2020, before settling in at the 2014 level. I don’t see anything here that suggests housing expenditures are squeezing out expenditures on other stuff. These numbers are only slightly higher than their all-time low.
This is only a quick look at one dataset. It’s consistent with what I said at the start of the post. It’s always been tough to pay the bills. There’s nothing special about 2026 in that regard.