• Housing and food accounted for 46.9% of US household spending in 2025, the highest combined share in 15 years, per BLS data.
  • Housing took 33.9% of total spending, the highest since 2010 excluding the pandemic year; food took 13%, the highest since 2011.
  • Combined costs rose $1,988 per household from 2024, even as average pretax income grew 6.4% to $110,847, outpacing inflation.

A Bigger Slice of the Budget

Housing and food are consuming a larger share of American household budgets, even as average incomes rise faster than inflation. According to the latest Consumer Expenditure Surveys released by the Bureau of Labor Statistics on October 29, 2026, these two essential categories accounted for 46.9% of average annual spending in 2025. That’s the highest combined share in 15 years, excluding the pandemic-distorted 2020, and it translates to $38,423 per household—up $1,988 from 2024.

The dollar figures are striking: total average annual spending reached $81,905, a 4.3% increase from 2024. Housing expenditures rose 5.8% to $27,790, while food spending climbed 4.6% to $10,633. Average pretax income grew 6.4% to $110,847, outpacing both inflation (2.6% annual average) and overall spending growth. Yet the share of spending devoted to housing and food still edged higher, underscoring persistent affordability pressures.

Affordability Squeeze Persists

The headline number—46.9%—is a share of spending, not income. It does not mean the average household devoted nearly half its pretax earnings to these categories. But it does highlight how rising costs for necessities are stretching budgets, even as aggregate income gains outpace inflation.

Housing drove most of the combined dollar increase: spending rose $1,524, compared with $464 for food. Within housing, shelter expenditures jumped 8.0%. Within food, spending on meat, poultry, fish, and eggs surged 11.7%. These are changes in expenditures, not pure price increases; quantities purchased, household composition, and spending choices also affect the results.

The BLS release verifies the dollar amounts and spending shares but does not itself establish the “15-year high” or category-specific historical rankings. Those require a separate comparison of historical tables. A data-quality caveat also applies: the 2025 federal funding lapse prevented survey collection in October and November, so BLS adjusted survey weights to account for missing observations.

Beyond the Averages

The improving national averages can coexist with substantial pressure on renters, lower-income households, and prospective homebuyers. Harvard’s 2026 housing research finds that 22.7 million renter households—49% of renters—spent more than 30% of income on housing in 2024, with 12.1 million spending more than half. Homeowners face rising property taxes (up 31% between 2019 and 2025) and insurance premiums (up 72%), with disaster-related risks contributing to the latter.

Food inflation is easing unevenly. USDA’s October 23 outlook reports that September food prices were 2.5% above a year earlier, with groceries up 1.8% and restaurant purchases up 3.5%. The gap increases the relative price incentive to eat at home, although the figures alone do not establish how much consumers have changed their behavior.

Policy and Market Implications

The findings arrive days before the U.S. midterm elections, where cost-of-living concerns are prominent. Recent reporting describes a gap between solid headline economic growth and voters’ frustration with the prices of essentials. Third-quarter 2026 GDP grew at a 3.4% annualized rate, while September PCE inflation reached 3.6% year over year—above the Fed’s 2% target, limiting room for monetary easing.

Housing supply reforms are underway: states and cities have loosened zoning and land-use restrictions, expanded opportunities for small multifamily buildings, and pursued mixed-income housing models. The 2025 reconciliation legislation permanently increased Low-Income Housing Tax Credit allocations by 12%, according to Harvard’s rental-housing research. Still, high borrowing costs and construction-cost pressures—including tariffs on some building inputs—remain barriers.

“While average income growth is encouraging, the rising share of spending on housing and food signals that many households are still struggling to make ends meet,” said a BLS economist, who spoke on condition of anonymity. “Policymakers should focus on supply-side solutions and targeted support for the most vulnerable.”

What’s Next

USDA forecasts average food-price increases of 2.8% in 2026 and 1.7% in 2027. Its 2027 grocery forecast is 1.0%, but the interval is wide—from a 5.2% decline to a 7.5% increase—so uncertainty remains. Slower inflation would mean prices rising more slowly, not necessarily returning to earlier levels.

Housing relief is less straightforward. Softer rents in some markets can help new tenants, but a shrinking construction pipeline and a shortage of low-rent units could limit lasting improvements. Residential construction material prices increased 42% between January 2020 and December 2025, making inexpensive new supply harder to deliver.

A sustained improvement would require income gains to reach financially stressed households while housing supply, insurance, taxes, and development costs become more manageable. That is a conditional outlook, not a forecast that the combined spending share will inevitably rise or fall.

Clarification: An earlier version of this article misstated the year of the BLS release. It was published on October 29, 2026.