“Mortgage rates close to 7%. Gas prices near their highest levels since 2022. A Federal Reserve interest-rate hike for the first time in three years,” the Wall Street Journal reports.
“Everything from buying a house to filling up your gas tank now costs more than even a week ago—putting affordability back in the spotlight just before midterm elections that will determine control of Congress.”
Yes, Americans continue to face higher living costs, with consumer prices rising 3.4% over the year ending in August 2026, according to the Bureau of Labor Statistics.
Energy is one of the biggest sources of pressure: energy prices were up 16.3%, including a 27.4% increase in gasoline and a 52% jump in fuel oil. Food prices increased 2.7%, shelter costs rose 3.0%, hospital services climbed 5.2%, and vehicle maintenance and repair was also up 5.2%.
Not everything became more expensive—used vehicles, motor-vehicle insurance and some medical goods declined—but price increases remain widespread.
And housing remains another major challenge. The BLS shelter index increased 3.0% over the past year, including a 2.7% increase in rent of primary residence and a 3.1% rise in owners’ equivalent rent. Those increases are particularly important because shelter represents such a large share of household spending and carries substantial weight in the Consumer Price Index.
Housing affordability involves more than inflation. Buyers also have to contend with financing costs, while renters can face increases when leases renew. The Federal Reserve’s August Beige Book reported that elevated interest rates continued to make prospective homebuyers hesitant in parts of the country.
There could also be additional pressure moving through the supply chain. The Producer Price Index rose 5.4% from a year earlier in August, indicating that many businesses are paying more for the goods and services they use. The Federal Reserve’s August Beige Book similarly reported price increases across all 12 Fed districts, with businesses citing higher energy, transportation, health-care, insurance and other costs.
The key point is that slower inflation does not mean prices return to their previous levels. Even when inflation moderates, prices can continue climbing on top of increases accumulated during previous years. That helps explain why many households can continue feeling squeezed even after the most severe inflation spikes have passed.
