Why Affordability and the Vibecession Are Real Economic Problems
8 days ago
- #inflation
- #affordability
- #economics
- Real median household income has recovered post-pandemic, but consumer sentiment remains low.
- Affordability concerns persist due to essentials like food, shelter, healthcare, and transportation rising faster than overall inflation.
- Lower-income households face more significant budget squeezes, leading to dissatisfaction despite wage increases.
- Inflation introduces complexity in decision-making, with 85% of respondents citing it as a major issue.
- Housing affordability is worsened by inflation's impact on mortgage rates and front-loaded real payments.
- Borrowing costs, excluded from official inflation measures, significantly affect living costs and sentiment.
- Policy interventions targeting housing, healthcare, and food costs could alleviate affordability issues.