Inflation data is skewed and does not factor in the reality that the costs of basic necessities like food and housing have not waned significantly since COVID began. Shelter costs, in particular, have become unaffordable for the majority. Redfin recently reported that 74% of Americans earning under $50,000 are seriously struggling to maintain consistent payments on their rent or mortgage.
Nealy, a quarter of Americans earning under $50,000 annually regularly skip meals and delay healthcare to cover the rent or mortgage. Nearly a quarter have admitted that they can no longer afford to eat three standard meals per day because the money must go toward shelter. Around the same percentage said they have been forced to sell off their belonging to make ends meet. Around 25% said they have asked family or friends for a loan, while 19% received a monetary gift to cover housing costs. Eight percent moved in with their parents, 10% moved in with other family members, and 3% moved in with their adult children. Six percent were sadly forced to abandon their pets, and 4% stated they delayed having children because the costs were simply too high. Eating out at restaurants (-43%) and vacations (-36%) are no longer in the budget.
Around 21% of this demographic have delayed or chose to forego medical care due to financial reasons. This could expand to Americans in many income brackets as healthcare is a luxury service. Countless people who can afford it simply travel to other countries to receive healthcare. I hear this frequently with dental procedures that are not as time sensistive in particular.
Shelter costs spiked 7.9% from January 2022 to January 2023, marking the largest annual increase since 1982. Shelters across America have reported a 23% rise in people seeking emergency assistance from 2019 to 2023. The median home in the US now costs $420,400, but it is hard to gauge an average cost when home prices vary significantly by state and city. People living in New York, California, and Hawaii are more likely to spend 50% or more on household income on shelter costs. Rental costs remain 20% higher than they were before COVID, while the cost to buy remains up by 40%.
This is precisely why they fail to include shelter costs in the inflation data. We hear the central banks tout how inflation is at or near their target but they omit key data. The talking heads in government like Yellen who claim people are better off than then before the pandemic are completely out of touch with reality.
