President Donald Trump, following the GOP’s November off-year election shellacking and a minor but sustained dip in his approval ratings, has been quick to reprioritize the cost-of-living conundrum. It’s a matter that originally delivered him a second term, after former President Joe Biden‘s four years in office.
“The Biden administration started the affordability crisis,” Trump said at the McDonald’s Impact Summit in Washington, D.C., adding that it remains his job to end it.
There is no question that disquiet over the economy is driving voter discontent about Trump. Nearly 6 in 10 voters polled by Marist in conjunction with NPR and PBS said the Trump administration must prioritize lowering prices, including 3 in 5 independents and 2 in 5 Republicans.
But the broader concern over cost of living is less about the economy as a whole, which has seen inflation moderate while maintaining robust growth and historically low unemployment. It’s more about the crisis-level shortage of housing that has created unprecedented costs for the disproportionately young.
Real average weekly earnings have risen a modest 1.2% since Trump took office in January, and excluding housing costs, the consumer price index is up 2.2%. That is still a tick above the Federal Reserve’s maximum 2% inflation benchmark, but the housing component of CPI is running about twice as hot. Concerns over the economy are really a concerted outrage over housing, as betrayed in the breakdown of Trump’s stumbling approval rating.
Trump’s net approval rating among boomers and Generation X voters in an Economist-YouGov poll has only wavered a handful of points since the first month of his second term. But net approval among millennials has crumbled 17 points, and among Generation Z, it has cratered by a staggering 31 points.
Most of the consumer price basket hits Americans across the age spectrum in a similar manner. Under the Biden administration, abysmal grocery and energy price increases (23% and 37%, respectively) pained everyone equally. Since Trump took office again, the moderation of grocery prices (up only 1.4%, in line with the Fed’s target inflation) and the actual decline in energy prices have benefited all ages with similar salience. But housing is another beast.
The age of the median first-time home buyer has skyrocketed to 40 years old, while Zillow found that the price of the average home has increased by over 45% since the start of the pandemic. This is nearly five times the central bank’s inflation target.
The culprit, as Tiana’s Take has expounded upon ad nauseam, is the patchwork of state and local zoning restrictions, especially those strengthened in the aftermath of the Great Recession, that brought new housing development to a standstill. And the cause was indeed the generational warfare of boomers who wanted to artificially juice up their properties as speculative asset bubbles at the cost of prices that made home ownership unaffordable for young people who understand a home is a place to start a family.
Because we built half as much housing in the 2010s as we did during the stagflationary hellhole of the 1970s, we’re currently facing a housing shortage of some 7 million new units. And the cost is further reaching than just the young people who cannot afford homes today. In a stunning and upsetting new study of Census Bureau data, University of Toronto economist Benjamin Couillard found that rising housing costs since the 1990s are responsible for 51% of the nation’s collapse in the total fertility rate.
The implications go beyond the shattered dreams of the millennials and zoomers being mocked for failing to afford home ownership and children. Rather, the collapse in the total fertility rate has expedited the insolvency of Social Security and Medicare, forcing an ever-shrinking and increasingly childless and lonely workforce to bankroll the wealthiest generation in history.
TRUMP TICKING OFF CAMPAIGN PROMISES, BUT PESKY ISSUE OF INFLATION STILL ELUDES HIM
Just as he did not create Biden’s near double-digit inflationary crisis, Trump did not create the catastrophic housing shortage. But if he wants to save his party’s fortunes in next year’s midterm elections and cement his legacy, the housing shortage crisis is indeed Trump’s responsibility.
Trump’s signature domestic achievement since returning to the White House, his self-styled “one big, beautiful bill,” has improved the federal tax code since becoming law. But now is the time for Trump to use his beloved bully pulpit and executive power to force state and local autocrats and their overzealous zoning restrictions into submission.
