THE GLOBAL AFFORDABILITY SQUEEZE

Around the world, people are not happy about higher costs.

- BY NEALE MAHONEY AND ADAM SHAW

IN THE U.S., HOME PRICES HAVE SHOT up about 45% since 2020, more than twice the typical rate of appreciation. In the U.K., household energy bills are 52% higher than their prepandemic level. And in countries such as Nigeria, Pakistan, and Haiti, food prices have doubled over the same period. Call it the global affordability squeeze: people around the world are facing the impact of high prices, and they're not happy about it.

This concern shows up clearly in polling data. In the U.S., cost-of-living issues consistently rank highest among problems facing the country, ahead of issues like crime and immigration. The pattern is similar in Europe, where rising prices and the cost of living eclipse concerns about defense and security. High prices have also been a flash point in the developing world, helping fuel protests from Indonesia to Peru—and even contributing to the collapse of the governments of Nepal and Madagascar.

The sources of strain differ across regions. In advanced economies, housing costs are the main driver of unaffordability, while in much of the developing world, food prices are the biggest pressure. In the U.S., health care expenses often rival housing as the top burden. In Europe, energy prices remain high after the post-Ukraine surge. And across rapidly growing cities in Asia and Africa, transportation costs squeeze middle-class families as urbanization outpaces the build-out of roads and public transit.