America's Cost Of Living Is Exploding –
These Numbers Are Alarming
Peter Reagan

There are a few ways economists try to measure how the economy is doing.

Gross domestic product is the one you’ll hear about most often. It gets reported, revised, debated – and then repeated as shorthand for “everything is fine.”

But if you’ve ever stood in a grocery aisle lately or looked at home prices in your area, you already know something doesn’t quite add up.

Because the economy on paper and the economy people live in aren’t always the same thing.

And if you want a clearer signal of what’s really happening, there’s one place I always come back to: Housing.

The state of America's most popular asset

Housing, also known as America's favorite asset, plays a massive role in the economy. Estimates of housing's contribution to GDP (construction, furnishing, the mortgage sector and so on) range from 15-18%. Something like $1 in every $6 of national GDP comes from what we sometimes call "the American dream." Even people who'd never participate in financial markets want to own their own home. To begin building equity and establish a firm foundation for future net worth.

For all these reasons, housing has a way of revealing stress before it shows up anywhere else.

It’s a mistake to think of your home as just another expense. For middle-class families, it’s the foundation everything else rests on. Whether or not you start a family. Whether you move to a new place or put down roots. Even when and where you'll retire – so many hopes and dreams depend on our homes.

That’s why one recent data point got my attention. Fortune recently noted that the average first-time homebuyer is now 40 years old. (That’s up from just 28 in the early 1990s!) Not surprising, considering that earlier this year fully 70% of American families couldn't afford the average home.

These days, it just takes longer to save up a down payment. Twelve years longer. 

Take a moment and think about what that really means. An entire decade of delay in building that stability, equity and independence we all treasure.

Something has shifted.

Supply, demand and home sales

Basic economics tells us that the law of supply and demand should help solve this problem, right? When prices rise beyond affordability, demand cools. And prices fall until rising demand meets them in equilibrium. Alternately, supply can rise as entrepreneurs spot an opportunity to profit from the status quo. 

So what's happening with prices? The Case Shiller Housing Index tells us that, nationwide, home prices rose 1.3% during 2025 (latest available data). 

If price isn't falling, then supply must be rising, right? According to Reuters, home construction spending actually fell in January.

That may sound like a technical detail, but it has very real consequences. Less construction means less supply. And when supply tightens without a matching drop in demand, prices tend to rise – or at least stay stubbornly high. Yet 70% of American families already can't afford homes!

Home prices are already elevated – both in nominal dollars and adjusted for inflation.

So instead of the home market correcting, instead of prices falling to equilibrium or supply rising to meet it, we’re looking at one that’s stuck in place. That means the door to homeownership isn’t just harder to open – it’s staying closed longer.

This isn't really a story about housing, though. It's a story about an entire generation of American families whose standard of living is in decline.

The great stagnation

The same pattern is showing up everywhere. Take a simple example.

A grocery trip that might have cost around $280 in the early 1990s? Today, it would run you over $700.

The average electric bill costs 50% more than it did just five years ago. 

I could cite examples all day, but here's the point: These aren’t isolated price increases. They’re part of a wider shift: the cost of maintaining a normal, middle-class lifestyle has moved much higher. And it hasn’t moved back.

Incomes haven’t kept up.

What that looks like in real life

You don’t need a spreadsheet to see the effects.

You see it when adult children stay home longer – not always by choice, but because the math doesn’t work.

You see it when families delay major decisions –buying a home, starting a family, retiring – because the margin for error feels thinner.

And you see it in smaller tradeoffs, too.

Choosing store-brand groceries over brand names more and more.

Putting off that visit to the doctor.

Carrying a balance on the credit card a little longer than you intended.

Now, none of these decisions feel dramatic on their own.

But over time, they add up.

Why this matters for retirement

For people approaching retirement, this shift creates a quiet but serious problem.

Because retirement planning depends on two assumptions:

1. That you can set aside enough during your working years
2. That your savings will stretch far enough once you stop working

Rising costs put pressure on both.

They reduce how much you can save today – and increase how much you’ll need tomorrow.

That’s where many people start to feel the squeeze most clearly.

Do you delay retirement?
Cut back on quality of life?
Or take on more risk than you’re comfortable with?

None of those are ideal options, right? 

If there’s one thread connecting all of this, it’s simple:

• Prices reset higher
• Incomes lag behind
• The gap gets filled – somehow. 

Sometimes we fill the gap with debt, sometimes with delay and sometimes with sacrifice. But never without consequence.

We’ve seen versions of this before, in different forms. And historically, periods like this tend to reward people who think carefully about how they manage their savings.

Not for growth. Not for speculation. But for stability over the decades.

That’s why more Americans are taking a closer look at assets that don’t rely on the same system that’s creating these pressures in the first place.

Physical precious metals have played that role for a long time – not because they’re exciting, but because they’re consistent.

They don’t depend on policy decisions.
They don’t require perfect timing.
And they’ve historically held their ground during periods of currency strain and rising costs.

I’m not saying they solve every problem.

But in a world where the affordability squeeze isn’t easing – and may not for some time – they’re one way people are choosing to bring a little more balance to their savings.

If you’d like to learn more, you can request our free 2026 Precious Metals Information Kitand explore the idea at your own pace.

Peter Reagan is a seasoned financial market strategist at Birch Gold Group with over 15 years of experience in the precious metals industry. He has been featured in several leading publications, including Newsmax and Zerohedge. At Birch Gold Group, Peter leverages his deep market insights to help educate customers on how they can diversify their savings into gold and other precious metals. His commitment to education has made him a trusted thought leader in the field. In addition to the Birch Gold website, you can follow Peter on LinkedIn.

www.birchgold.com