Nearly Half of Household Spending Now Goes to Housing and Groceries

For millions of American families, balancing a household budget has become harder than ever. Federal data show that the most basic necessities are taking an outsized share of paychecks. According to Quartz, housing made up 33.9% of average household spending and food accounted for 13.0%. Together, those two essentials now absorb nearly 47% of what a typical U.S. family spends each year, the highest combined share in 15 years.

That strain is appearing even as workers are bringing home more money before taxes. Average annual spending climbed to $81,905, up 4.3% from the year before, while average pretax household income increased 6.4% to $110,847. But essential expenses rose faster than overall spending. Quartz said food and housing were the only major categories with statistically significant gains, according to the BLS. Families spent $1,988 more on those two categories combined than they did in the prior year.

Housing remains the biggest financial challenge for most consumers nationwide. Quartz reported that average housing spending reached $27,790, rising 5.8% because shelter costs increased 8.0%. Renters were hit especially hard, with spending on rented dwellings up 10.8% in a year. Excluding the unusual pandemic-era spike in 2020, housing took the largest share of the budget since 2010. Transportation came next at 16.5% of total spending, followed by personal insurance and pensions at 12.4%.

Grocery bills are not providing much relief either. Average food spending increased 4.6% to $10,633 per household, reaching its biggest budget share since 2011. Protein costs are driving much of the pain at checkout. Quartz noted that meat, poultry, fish and eggs made up about 24% of the grocery bill, and spending on those items rose 11.7% to $1,579. Those staples accounted for roughly 95% of the increase in typical grocery spending over the past two years.

Price pressure has also continued after the federal survey period ended. Quartz explained that inflation has picked up since the survey window covered by the data. The Consumer Price Index rose 0.6% in September, lifting the annual inflation rate to 3.7%. Higher gasoline prices and ongoing global conflicts are still adding to grocery and utility costs.

Sources:

• Quartz: Americans spend almost half their budgets on housing and food
• U.S. Bureau of Labor Statistics: Consumer Expenditure Surveys