I understand the claim that “the economy is doing great.” Inflation (the rate at which prices are increasing) is down. Unemployment is low. The stock market is booming.

“The economy is doing great” isn’t the whole story; it’s not the story many people feel. Sure, inflation is down, but the price level is much higher. For many (most?) increasing wages have not kept up with that price level. Housing, as shown in the link, may lead concern in this area. Here’s a bit from that article on housing costs:

“When mortgage interest rates were hiked in 2022, homeownership shot out of reach for the median household income. By June 2024, the required income had climbed to about $120,000. And with the median household income trailing at around $84,000, a small affordability gap suddenly became a staggering $36,000 deficit. That means the minimum required income for a median-priced home is now more than 40% above actual median incomes.”

I’m not smart enough to see an easy fix to the problem (though our leading candidates make confident pronouncements about what they’ll do). We could do something that makes wages go up – that’s wage inflation. We could do something that housing costs go down (increasing supply is the natural way to do that, but building isn’t keeping up), but if we see housing DEflation, the longer that deflation comes after the inflation, the greater the number of homeowners will be “underwater” (their homes are worth less than what they owe). There is also a large established base of homeowners who LIKE the idea that the value of their property is increased so much and they take it to be in their own interest to keep the price high.