Every month somebody announces that inflation is up, down, improving, sticky, transitory, stubborn, cooling, reheating, or apparently doing yoga.
Then you look at your mortgage payment, rent, electric bill, insurance, groceries, and car payment and wonder whether the economists are measuring the same country you live in.
They are.
Sort of.
The Problem With the Average American
The United States has roughly 340 million people, and apparently one of them is the Average American.
We have never met him.
He lives simultaneously in Memphis, Manhattan, Miami, rural Iowa, and San Francisco. His rent is somehow an average of all of theirs. His utility bill experiences four climates at once. His property taxes are part Texas, part Tennessee, and part New Jersey.
Then we calculate one national number and tell everybody how they’re doing.
Useful? Yes.
Enough? Not remotely.
Housing Is Where the Math Gets Personal
For most households, shelter is the monster sitting in the middle of the budget.
If your rent goes up $300 a month, you cannot fix that by buying generic cereal.
If mortgage rates turn the house you could afford three years ago into a house you cannot afford today, the national inflation rate does not make the payment smaller.
And if insurance, property taxes, utilities, and maintenance are climbing at the same time, “housing cost” is doing a lot more damage than one tidy line in an economic report suggests.
That is why we want to measure affordability where people actually live.
Not just nationally.
State. Metro. County. Congressional district. Household.
We Want the Receipts
Our affordability work starts with a simple question:
After paying for the things you cannot reasonably avoid, how much life is left in the paycheck?
Housing. Transportation. Food. Utilities. Insurance. Healthcare. Debt. Childcare where it applies.
Then compare that with actual local income.
Suddenly two families earning the same $80,000 can look very different.
One may be doing reasonably well.
The other may be one transmission failure away from discovering that the American Dream has an overdraft fee.
This Is Why “Inflation Is Down” Can Be True While You Still Feel Broke
Those statements are not necessarily contradictory.
Inflation measures the rate at which prices are changing.
Your household has to pay the price level that already exists.
If something went from $100 to $125 and then inflation slowed dramatically, congratulations: it may now be rising more slowly.
It still costs $125.
That distinction gets lost constantly.
It won’t get lost here.
What We’re Building
The goal of our affordability model is not to produce another national number that gets quoted on television for six minutes and forgotten.
We want to know:
Where are households actually getting squeezed?
Which expenses are causing it?
Which age groups are taking the hit?
Which parts of the country are becoming harder to live in?
And when somebody in Washington says a policy will make life more affordable, which households actually get the benefit—and which ones get the bill?
Because eventually every economic argument should have to answer one extremely technical question:
Show us the damn receipt.