Nearly half of American households did not earn enough to cover their basic necessities in 2024. That is the central finding of new research from the Brookings Institution released Wednesday, which measured affordability by comparing the rising costs of essentials against family incomes.
The report found that 45.5% of U.S. households fell short in 2024. Researchers gathered household income data for every county in the country and compared those figures against estimated local costs for necessities including food, housing, healthcare, childcare, and transportation.
The gap between wages and inflation is a key driver. National wages rose just 1.3% in 2024, well below that year's inflation rate of 2.9%, according to the Census Bureau.
"My main takeaway is that when we talk about affordability, we've been focusing on inflation. But there's the income side of the story that we often do not talk about," said Andre Perry, the director of Brookings' Center for Community Uplift.
For some families, closing the gap between income and essential costs has meant skipping meals, taking on debt, and delaying medical care, the report found. Housing, healthcare, and childcare were identified as the largest and most difficult costs to control. "In order to actually solve affordability, we have to deal with these larger, most structural costs that are harming households," said Hannah Stephens, a senior research assistant at the center.
The data showed wide variation across states and racial groups. More than 50% of families in New York state could not manage on their incomes in 2024. In Washington, D.C., more than 60% of households could afford their necessities, above the national average, but the city's Black residents were more than 20 percentage points behind the district's overall baseline. Hispanic households in D.C. performed about 3 percentage points above the city's baseline.
The affordability crisis is not new. The report found that more than 40% of households could not afford what they needed in almost every year from 2014 to 2024. The two exceptions were 2021 and 2022, when federal stimulus checks and pandemic-era government assistance temporarily lifted household finances. That improvement reversed in late 2022 as inflation spiked and those programs expired.
