Dave Meyer asks whether the U.S. affordability crisis is real, defining affordability as prices relative to paychecks. He compares Bureau of Labor Statistics median weekly earnings with CPI, using first-half averages for today versus 2019, 2009 and 1999. Wages are up 37%, 69% and 130%, against CPI gains of 30%, 55% and roughly 100%, so in aggregate wages have beaten prices.
By category, energy (+205% since 1999), child care and college (about +200%), and rent have outpaced wages. Mortgage payments are up 116% since 2019 against 37% income growth. Food, transportation and the overall basket have roughly kept pace. People feel squeezed because real wage growth is only about half a percent a year, was negative in 2021-23 and is negative again, and the savings rate has fallen to about 3% from 7.5%. For investors, Meyer advises bigger reserves, modest rent-growth assumptions and higher operating-cost budgets.