Analyzing differential cost trends across housing, healthcare, education, and food from 1980 to 2024
Last updated: October 7, 2025 @ 22:00 UTC
Standard economic indicators show unemployment is low, wages are rising, and inflation has moderated. Yet surveys consistently show Americans report significant financial stress around housing costs, healthcare expenses, and education debt.
This analysis examines spending patterns across four major categories from 1980-2024. The data reveals a bifurcation in the American economy: consumption goods have remained affordable relative to wages, while investment goods—those that enable wealth building and economic mobility—have become significantly less affordable.
The following four charts show these trends.
Home prices have increased 73% more than incomes relative to historical norms—even after adjusting for 35% larger homes, still 28% less affordable
The median home price to median household income ratio currently sits at 5.10x. The historical average is 2.94x. This represents a 73% increase in the ratio compared to historical norms.
A quality adjustment is warranted: the median new home is 2,146 square feet compared to 1,595 in 1980—35% larger. Adjusting for this size difference, housing affordability has declined by 28% relative to the historical average.
However, buyers cannot readily substitute smaller homes at proportionally lower prices. Zoning regulations, building codes, and market conditions limit the availability of smaller new construction in most markets.
Current figures: median home price is $410,800 and median household income is $83,730, yielding the 5.10x ratio noted above.
Medical costs have increased substantially more than wage growth since 1980
Healthcare costs have increased 4,323% since 1947. Focusing on the 1980-2024 period, healthcare costs have grown 70% faster than wages.
In relative terms: healthcare costs consume 70% more of hourly wages today than they did in 1980.
Quality improvements must be considered in this analysis. Modern healthcare includes technologies unavailable in 1980: MRI and CT imaging, advanced cancer treatments, biologics, and minimally invasive surgical techniques that improve patient outcomes.
However, patients face current market prices regardless of which treatments they require. A 2018 JAMA study comparing the US to 10 high-income countries found the US spends 8% of healthcare costs on administrative complexity—compared to 1-3% in other nations. This amounts to approximately $1,000 per person in the US versus $170 elsewhere. Administrative costs are a significant driver of why US healthcare spending is approximately twice that of comparable countries.
The quality improvement argument, while valid, does not fully explain cost differentials when compared to other developed nations with similar health outcomes and technology access.
Education costs have grown 109 percentage points faster than wages since 1993
Since 1993 (when reliable data begins), education costs have increased 282% while wages have increased 173%. That's a gap of 109 percentage points.
In relative terms: education costs consume 40% more of hourly wages today compared to 1993.
Quality adjustments in education are more difficult to quantify than in housing or healthcare. Modern campuses include upgraded facilities, technology infrastructure, and expanded student services unavailable in 1993. However, measuring educational quality improvements through learning outcomes or labor market preparation remains an active area of research without clear consensus.
Labor market returns to a college degree have increased over this period, though economists debate whether this reflects improved educational quality or increased credentialing requirements for positions that previously did not require degrees. The practical effect is that higher education has become increasingly necessary for access to middle-class occupations, making the cost trends economically significant regardless of their underlying causes.
Food has become 15% more affordable relative to wages since 1980
Since 1980, food prices have increased 280% while average hourly wages increased 340% over the same period. Food has become 14.5% more affordable relative to wages.
This represents the only major spending category examined in this analysis where relative affordability has improved compared to the 1980 baseline.
However, food represents a smaller share of household budgets compared to housing, healthcare, and education costs. The Bureau of Labor Statistics reports that food accounts for approximately 12-13% of household expenditures, while housing accounts for 33%, and healthcare for 8%. The differential affordability trends across these categories therefore have asymmetric impacts on overall household financial well-being.
Investment goods (housing, healthcare, education) have diverged sharply from consumption goods (food)
The data reveals distinct patterns across spending categories:
Consumption Goods (Food, commodities, basic necessities)
Investment Goods (Housing, healthcare, education)
This bifurcation helps explain divergent economic perceptions. Aggregate measures like the Consumer Price Index weight all goods and services proportionally. When wage growth matches or exceeds CPI, economists typically conclude real wages are stable or improving.
However, this aggregate measure does not distinguish between the affordability of different spending categories. The data show that households can more easily afford consumption goods like food, while simultaneously facing reduced affordability for investment goods like housing, healthcare, and education.
Since investment goods typically require larger budget allocations and have longer-term financial consequences (mortgages, medical debt, student loans), the differential affordability trends may contribute to financial stress despite positive aggregate indicators.
The differential affordability trends across spending categories suggest that aggregate inflation measures may not fully capture the policy-relevant economic pressures facing households. Investment goods—housing, healthcare, and education—represent larger budget shares and have long-term financial implications through debt accumulation.
Policy interventions targeting specific categories have been proposed by various economists and policymakers:
These policy options remain subject to debate regarding their effectiveness, implementation costs, and trade-offs. The data presented here document the cost trends but do not prescribe specific policy solutions.
This analysis examined affordability trends across four major spending categories from 1980 to 2024, comparing cost increases to wage growth.
Key findings: Food costs have become 14.5% more affordable relative to wages. Housing, healthcare, and education costs have all increased substantially faster than wages—by 73 percentage points (housing), 70 percentage points (healthcare), and 109 percentage points (education) respectively.
These differential trends across spending categories may help explain why households report financial stress despite positive aggregate economic indicators like low unemployment and stable CPI-adjusted wages.
Data sources: Federal Reserve Economic Data (FRED), U.S. Census Bureau
Analysis period: 1980-2024. All wage comparisons use average hourly earnings for private sector workers. Housing data includes quality adjustment for 35% larger median home size. Healthcare and education CPI data from Bureau of Labor Statistics.