I’ve seen data showing the purchasing power of the average American is higher than ever despite inflation and soaring home prices.
My lived experience as someone in their late 20s in a HCOL city tells me that there is certainly an affordability crisis occurring in many of our major cities. Most of my friends can’t afford to have children and there simply aren’t enough employment opportunities in LCOL areas to make them tenable. Real estate prices should affect the pricing of most goods and services and it’s therefore difficult to imagine that my purchasing power is higher today than in the 1960s given our relatively slow wage growth.
Are the data supportive of the view that there’s an ongoing affordability crisis? Is it true that the average American’s purchasing power is higher than ever?
Is the affordability crisis real?
byu/bruvunit inAskEconomics
Posted by bruvunit
1 Comment
> Is it true that the average American’s purchasing power is higher than ever?
[Yes](https://fred.stlouisfed.org/series/LES1252881600Q)
>Are the data supportive of the view that there’s an ongoing affordability crisis?
There are two things going on. There is an idealized version of the past and, certain things have gotten more expensive (one key one is housing in our highest productivity cities) even if average costs across the typical spending basket have fallen.