Arlington, VA—A new report from the American Consumer Institute (ACI) finds that the popular narrative of an affordability crisis in the United States is more complicated than commonly portrayed. While inflation-adjusted income and purchasing power have broadly improved compared with prior generations, the report identifies specific areas where rising costs can contribute to economic discontent.
Housing stands out as a significant exception to the broader positive trend. As one of the largest and least flexible components of household budgets, rising housing costs can have an outsized impact on how Americans experience financial strain.
The report finds that higher housing costs are driven not by broad economic decline, but by supply constraints resulting from restrictive zoning, regulatory barriers, and limited new construction. While many policy responses seek to reduce out-of-pocket costs through subsidies, rental assistance, or restrictions on who can purchase and invest in housing, these approaches do not reduce the underlying market price of housing.
Expanding housing supply and reducing barriers to new construction are necessary to address high prices and improve how Americans experience affordability. Addressing the cost of housing is key to improving affordability for American consumers.
Read the full report below.
Tirzah Duren is the President and CEO of the American Consumer Institute, a nonprofit education and research organization. Follow Tirzah on X @tzduren