Affordability: The Defining Issue of the Year and What It Means for Investors

Affordability has become a central national concern, surpassing inflation as the primary economic issue shaping public sentiment and political dialogue. Despite slowing inflation, the high cost of essentials—especially housing, healthcare, childcare, and insurance—continues to strain households, creating a disconnect between strong economic data and how Americans feel about their financial stability. While net worth has risen and labor markets remain healthy, elevated prices and uneven household experiences contribute to persistent anxiety. Policymakers are likely to focus on housing supply, healthcare costs, wage standards, and targeted fiscal support. For investors and households, maintaining cash-flow awareness, considering fixed-rate options, diversifying with real assets, and monitoring policy changes can help navigate an environment where affordability pressures influence both behavior and markets.