The Affordability Crisis: What the Numbers Actually Show

Opening: The Question Everyone's Asking

How is anyone affording anything right now?

If you've asked yourself this question, you're not alone. And the answer isn't what you think.

Let me show you what the data actually says—not theories, not blame, just patterns that keep repeating throughout history.

The Numbers Don't Lie

Let's start with what we can measure.

Housing: The median home price has risen approximately 35% since 2020. That means a house that cost $300,000 five years ago now costs over $400,000. The down payment went from $30,000 to $40,000—assuming you can even qualify for a mortgage at current rates.

For reference, eleven years ago, you could buy a three-bedroom home for $150,000 with a $10,000 deposit. Today, that same home requires $70,000-$80,000 down in many markets.

Insurance: Homeowners insurance premiums increased 24% from 2021 to 2024. Some states saw increases approaching 60%. If you bought a home in 2021, your insurance renewal in 2024 likely cost you 69% more—an extra $865 per year.

Your mortgage payment can jump $200-$300 per month even on a fixed-rate loan when your escrow adjusts for these insurance and property tax increases.

Childcare: The national average for center-based infant care is $15,570 per year. In major metro areas, that number exceeds $25,000. In New York City, full-time infant care runs $34,500 annually—more than many state university tuitions.

Everyday goods: A tube of name-brand toothpaste that used to cost $3-4 now runs $7-10. Mascara that was $8-12 is now $17-25. Children's snow boots at Walmart: $50.

Are these the cheapest options? No. But they represent what many families actually buy, and the price increases are real.

Wages: Real wages—meaning wages adjusted for inflation—grew approximately 1.1% from December 2024 to December 2025 according to the Bureau of Labor Statistics.

That's technically growth. But when your insurance is up 24%, your childcare costs $15,000-$35,000 per year, and housing eats 35-40% of your income, a 1% raise doesn't solve the problem.

This is the gap. Wages grow at 1%. Essential costs grow at 10-60% depending on category.

The Debt Reality

Here's what the Federal Reserve reports:

Total U.S. household debt hit $18.39 trillion in the second quarter of 2025. That's an all-time record.

Credit card balances average $6,400 per borrower, with utilization rates approaching 30%—a threshold that historically precedes stress.

Delinquency rates are rising.

So when you see people driving new cars, taking vacations, appearing financially stable—ask yourself: is that wealth, or is that leverage?

The answer, statistically, is often leverage.

This isn't judgment. It's pattern recognition. We've seen this before.

What Happened in 2008

Let's talk about the last time household debt reached these levels relative to income.

In 2008, the median American household held a net worth of $126,400.

By 2010, that number had fallen to $77,300—a 39% decline.

The bottom 50% of Americans lost wealth. The top 10% recovered faster. Not because of conspiracy, but because of asset composition and information access.

Middle-class families held most of their wealth in home equity. When housing collapsed, they were wiped out.

Wealthy families held diversified assets, cash reserves, and had access to credit during the crisis. They bought assets at the bottom.

From 2008 to 2023, the top 1% gained $35 trillion in wealth. The bottom 50% lost $900 billion.

That's not theory. That's Federal Reserve data.

The Pattern Nobody Talks About

Here's something institutional economists don't emphasize: insider behavior.

Warren Buffett's Berkshire Hathaway is currently holding $381.7 billion in cash—the largest cash position in the company's history and nearly 5% of the entire U.S. Treasury market.

That's 27% of Berkshire's total assets in cash, compared to a 25-year average of 13%.

Buffett has been a net seller of stocks for three consecutive years, even as the S&P 500 hit record highs.

In 2025, corporate insiders sold $16 billion in stock. Jeff Bezos alone liquidated $5.7 billion. Oracle's former CEO sold $2.5 billion. This followed 2021's record $69 billion in insider sales—80% above the 10-year average.

Why does this matter?

Because this is the same pattern that appeared before 1929 and before 2008.

Joseph Kennedy systematically liquidated his stock positions in the summer of 1929 while newspapers promised “endless prosperity.” Weeks later, Black Tuesday hit.

In 2007, major bank executives sold stock while their own analysts issued buy recommendations to clients.

Insiders don't need conspiracy. They have information access. They see the company books, the deal flow, the credit quality. They act on what they know, not what they say publicly.

When the most successful investor in history is holding $382 billion in cash instead of buying stocks at record highs, that's not pessimism. That's pattern recognition.

The Expert Problem

Now let's address the elephant in the room: economic forecasters.

The International Monetary Fund has predicted 4 out of 469 economic downturns across 30 years and 194 countries.

That's a 0.85% accuracy rate.

MIT economist Prakash Loungani studied the 1990s and found that economists failed to predict 148 out of 150 recessions. His conclusion: their “record of failure is virtually unblemished.”

The Brookings Institution documented that the IMF was “totally flatfooted” by the 2008-2009 recession, missed the 2010 Eurozone crisis, and failed to warn about 2021 inflation.

IMF forecast errors average 10% of GDP—economically massive.

So when experts say “soft landing” or “28% recession probability,” remember: they have a 97% failure rate predicting recessions within 12 months.

This isn't anti-expert bias. This is their documented track record.

The question isn't whether you trust them. The question is whether their forecasts have predictive value—and historically, they don't.

The Middle Class Reality

As of late 2024, 55% of middle-income Americans rated their finances as “not so good” or “poor”—up from 33% in early 2021.

Only 21% believe they'll be better off financially next year, down from 33% in 2020.

Meanwhile, 34% expect to be worse off, up from 17%.

The middle class now represents 51% of Americans, down from 61% in previous decades. The trend continues downward.

Why?

Because essential costs—housing, healthcare, childcare, education, insurance—are rising faster than wages. And when the next financial shock hits, leveraged households break first.

In 2008, families that looked stable turned out to be over-leveraged. Credit card defaults spiked. Foreclosures cascaded.

The early warning signs were visible 18 months before the crisis, but dismissed as “pessimism.”

What Should You Do With This Information?

I'm not telling you the sky is falling. I'm telling you what the numbers show and what has happened before when similar patterns appeared.

Reduce leverage where possible. Debt amplifies both gains and losses. In a downturn, it destroys you.

Build cash reserves. Buffett isn't holding $382 billion in cash because he's scared. He's holding it because cash is optionality. When assets go on sale, cash buyers win.

Focus on essentials. If 55% of middle-income families already feel financially stressed, and we're not even in a recession yet, what happens when unemployment rises?

Stop comparing yourself to appearances. That neighbor with the new cars and the lavish lifestyle? Statistically, they're likely leveraged. Debt looks like wealth until the bill comes due.

Watch what people do, not what they say. Executives are cashing out. The smartest investor alive is hoarding cash. The Federal Reserve reports record household debt with rising delinquencies.

These are observable facts, not conspiracy theories.

The Truth About Systems

Here's the part people get wrong.

You don't need a “plan” or “coordination” for wealth to concentrate during crises. You just need incentive structures and information asymmetry.

Insiders know more than you. They see the data first. They act first.

Bailouts go to institutions, not households, because institutions lobby and households don't.

Asset prices collapse, wiping out middle-class wealth, while those with cash and credit buy at the bottom.

This isn't evil. It's mechanical. It's how the system is structured.

The 2008 wealth transfer wasn't orchestrated. It was inevitable given the conditions: overleveraged households, concentrated wealth, information advantages, and policy responses that prioritized institutions over individuals.

Those conditions exist again.

The Historical Pattern

Every major financial crisis follows the same sequence:

Debt expansion normalizes. Leverage becomes standard. “Everyone's doing it.”
Warning signs appear 12-18 months early. Insiders exit. Experts dismiss concerns.
The trigger hits. Credit tightens. Overleveraged borrowers default.
The cascade begins. Asset prices fall. Wealth transfers from leveraged to unleveraged, from informed to uninformed.
The recovery benefits those with cash, assets, and access to credit.

We're somewhere between step 2 and step 3.

How do I know?

Because household debt is at record highs. Insider selling is elevated. The most successful investor in modern history is holding record cash. Delinquencies are rising. Expert forecasters are optimistic—and they always are before crashes.

Final Thoughts

I'm not saying sell everything and hide in a bunker.

I'm saying understand the pattern.

Wages up 1%. Insurance up 24%. Housing up 35%. Childcare $15,000-$35,000. Household debt $18.39 trillion. Credit card utilization approaching stress levels. Insiders selling. Buffett hoarding cash. Experts predicting soft landings—just like they did in 1929 and 2007.

You don't have to believe me.

Just watch what happens next.

And when it does, remember: this wasn't unpredictable. The pattern was always there.

The people who preserve wealth through crises aren't lucky. They're prepared.

They have cash when everyone else is leveraged. They buy when everyone else is forced to sell. They see the pattern while everyone else listens to experts with a 97% failure rate.

History doesn't repeat, but it rhymes.

And right now, it's rhyming loud.

End of Script