Housing and Food Costs Claim Half of Household Budgets

Essential expenses reached 46.9% of total annual spending in 2025, leaving less room for savings for most families.

Updated on Oct. 30, 2026 in Spending

Flat opaque gouache-painted editorial illustration of a wicker basket with bread and eggs next to a house key. — Rising costs for housing and food claimed 46.9% of U.S. household expenditures in 2025, according to the latest annual data. AI Illustration. Upload story photo >

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Is your household income keeping pace with rising costs for housing and food?

In 2025, U.S. households directed 46.9% of their total annual expenditures toward housing and food. This combined spending represents a significant portion of the average annual expenditure of $81,905 reported for the year.

Why it matters

Rising costs for essential needs like shelter and groceries are tightening household budgets across the country. With shelter costs up 8% and food spending climbing 4.6% since 2024, many families face less flexibility for savings or other financial goals.

The average household spent $27,790 on housing and $10,633 on food in 2025, a combined increase of $1,988 over the previous year. This reflects broad inflationary pressure, specifically an 8% rise in shelter costs and an 11.7% jump in spending for meats, poultry, fish, and eggs.

The details

Rising expenditures are driven primarily by a persistent 8% increase in shelter costs combined with higher grocery prices. Specifically, outlays for animal proteins including meat, poultry, fish, and eggs rose 11.7% annually. These essentials now absorb nearly half of total average spending, leaving less remaining for transportation, insurance, or retirement contributions from the average pretax income of $110,847.

2010 marked the previous peak for the housing share of total spending.
2011 marked the previous peak for the food share of total spending.
2024 serves as the baseline year for this expenditure comparison.
Data collection for the survey was interrupted during October-November 2025.
Data collection resumed in December 2025.

Money Landscape

The 2025 expenditure data indicates that essential costs have returned to levels last seen during the 2010 and 2011 fiscal peaks. This trend highlights a period where housing and food affordability challenges are narrowing the financial buffer for most U.S. households.

With necessities consuming nearly half of your annual expenditures, reviewing your monthly budget to identify non-essential cost adjustments is increasingly important. If these rising costs strain your savings, consider meeting with a financial professional to evaluate your household debt and long-term financial plan.

The takeaway

Essential items are absorbing a larger share of the average American household budget than in recent years. Track your own spending trends by comparing your recent housing and grocery receipts against your 2024 records to see how these economy-wide shifts affect your specific household.