Americans now spend nearly half of their budgets on food and housing alone, the biggest share in 15 years

Americans are spending an increasingly significant portion of their budgets on essential expenses such as housing and food, a trend that has risen sharply in recent years. According to the U.S. Bureau of Labor Statistics, nearly half of average American expenditures in 2025 were dedicated to housing and food, up from 45.2% in the previous year.

Housing costs specifically increased by 5.8%, with the average household paying $27,790 in 2025, up from $26,266 in 2024. Shelter expenses alone rose by 8%, while owned dwellings saw a 7.3% increase. Food spending also climbed, with the average consumer shelling out $10,633 in 2025, a 4.6% increase from $10,169 in 2024. This surge in housing and food expenses has left less room for discretionary spending, contributing to a decline in consumer sentiment.

The University of Michigan's consumer sentiment index fell to 48.0 in October 2025, a 10.4% decrease from September's 48.1 but still 10.4% lower than the October 2025 reading of 53.6. The current economic conditions index also dipped, indicating the economic pressures faced by Americans. These mounting financial burdens have permeated into 2026, with 49% of American families reportedly lacking the resources to cover essential expenses securely.

The issue of affordability has become a focal point in American political discourse, with a majority of Americans expressing pessimism about economic conditions improving in the coming year.