Cost of Living and Housing Affordability: What Squeezed Budgets Mean

How the grocery aisle connects to the housing market

If a household needs to spend more on food, gas and everyday basics, how much is left over for housing? Less, and that is the quiet link between the cost-of-living story and the housing market. Rent and mortgage payments are usually the largest bills a family pays, but they are not paid in isolation. Every dollar that goes to groceries, fuel, insurance and credit-card minimums comes from the same paycheck.

That is the thread running through a recent video from the YouTube channel Edwards Economics, which used Walmart as a barometer. The creator, Kaylin, argues that when shoppers say they struggle to afford the store built for tight budgets, it says something about everyone else. The video is mostly about groceries, not homes. But the pressure it describes shows up in housing decisions: who can save a down payment, who can absorb a rent increase, and who qualifies for a loan.

This article takes the video's figures as claims to weigh, adds public-data context, and spells out what it may mean for buyers, sellers, owners and renters.

What the Walmart numbers show

Edwards Economics starts with Walmart's own results, because a retailer's earnings are harder to dismiss than viral shopping clips. According to the video, Walmart brought in about $188 billion last quarter, with total sales up almost 6% and online sales up 24%. On the surface, that is a healthy company.

The detail underneath is more telling. Sales at stores open at least a year, a measure called comparable or same-store sales, rose 2.6%, compared with 4.6% a year earlier. The creator calls that the slowest pace since 2020, and says the stock fell about 9% on the day the results came out.

The video also relays what executives said. The CEO described many households as carefully managing budgets. The CFO said shoppers began making trade-offs once gas passed $4 a gallon. And, according to a financial news segment the creator recalls watching, much of the growth came from households earning more than $100,000, who are trading down from stores like Target or Whole Foods.

Key figures cited in the video

These numbers come from the video and have not been independently checked for this article. Readers who want primary sources can compare them with the Bureau of Labor Statistics consumer price index and the Federal Reserve's household well-being survey, linked below.

Why prices that stopped rising still hurt

One of the more useful points in the video is a distinction many people blur: a slower inflation rate is not the same as lower prices. Edwards Economics notes that food was up only about 1.8% from a year earlier in the latest reading, with eggs down and milk and butter getting cheaper. Yet the cumulative increase since early 2020 is large, and those higher price levels did not reverse.

Inflation measures the speed of price changes, not the level. If a grocery basket costs 32% more than it did in January 2020 and is now rising slowly, the budget problem remains. Households are paying the new, higher price every week, and many feel it more than a modest annual percentage suggests.

The creator adds that average wages rose by roughly the same amount over that stretch, but argues averages hide a lot. Raises at the top pull the average up, while lower- and middle-income workers may have seen smaller gains. Over the most recent year, the video says, the average paycheck lost ground after inflation. Whether that holds for a particular worker depends on their industry, region and employer.

Housing has the same pattern

The same logic applies to shelter. Even if home-price growth or rent growth cools, the level matters for a first-time buyer comparing a payment with their income. For a deeper look at how rates, prices and payments combine, see our explainer on why it is so hard to buy a house, and for the long-run comparison, what the numbers show about affordability at a 40-year low.

Thin cushions: savings, credit and buy now, pay later

The most housing-relevant part of the video is not the price of deodorant. It is the discussion of how little slack many households have.

Edwards Economics cites the Federal Reserve as saying that 37% of adults could not cover a $400 emergency expense using cash. The creator also says 29% of people who use buy now, pay later (BNPL) have used it for groceries, and that almost half of them then paid late. The video's conclusion: for these households, the grocery bill itself is no longer the main problem. The problem is that nothing is left once rent, a car payment and gas are covered.

That matters for housing in at least three ways:

• Down payments and closing costs. A household that cannot absorb a $400 surprise is unlikely to be building a five-figure savings balance.
• Reserves after closing. Lenders and housing counselors generally like to see cash left over after a purchase, because homeownership brings repairs, taxes and insurance.
• Credit profiles. Late payments and rising balances can affect credit scores and debt-to-income ratios, which feed straight into mortgage approval and pricing. Our piece on rising debt collection lawsuits and mortgage approval covers how that plays out.

Financing everyday purchases is not automatically a sign of distress, and BNPL products vary widely. But the creator's point stands as a signal to watch: when essentials move onto installment plans, the monthly budget has little room for a larger housing payment.

Tariffs, rollbacks and trading down

The video also touches on trade policy. Edwards Economics says the Supreme Court struck down certain tariffs in February, and that Walmart received about $2.9 billion back. The company, according to the video, turned that into more than 11,000 price rollbacks, compared with about 5,000 in a normal quarter.

The creator's reading is skeptical: a rollback is temporary, and the prior price level is not coming back. As evidence of changing behavior, the video says store brands have reached a record share of what Americans buy, with shoppers leaving name brands such as Heinz for Walmart's Great Value label rather than leaving the store altogether.

Trading down is a normal budgeting response, and it is also a clue. Households protect the big fixed bills first. Rent or a mortgage payment is hard to shrink quickly, so the squeeze shows up in discretionary and food spending. When that no longer closes the gap, the next steps tend to be borrowing, doubling up with roommates or family, delaying a move, or postponing a purchase.

The video's closing argument is that Walmart wins in good times and bad, while the families hurt most are those already shopping there who have no cheaper store left to switch to. Housing offers a similar dynamic: there is no "store-brand" version of a lease or mortgage that can be swapped in at a moment's notice, apart from moving to a less expensive home or area.

Limits and counterpoints

The video is a useful snapshot, but readers should keep its limits in mind.

• Much of the evidence is anecdotal. Viral clips of single shopping trips, a $100 bag of toiletries, or one-off price comparisons show real frustration but do not measure national prices. The official consumer price index is a broader and more reliable gauge.
• Some claims are unverified. The video mentions concerns that digital shelf tags may change prices or show mismatched unit prices. Those are shopper reports, not established findings, and we have not confirmed them.
• Averages cut both ways. Walmart's growth among higher earners shows spending is still resilient in parts of the economy. Households with stable jobs and savings may be better positioned than the video implies.
• Housing has its own drivers. Mortgage rates, home inventory, insurance costs, property taxes and local wages shape affordability independently of grocery prices. Cost-of-living pressure is one factor, not the whole story.
• Creator perspective. Edwards Economics describes its approach as including a faith-based lens, and the tone of the video is conversational and opinionated. Treat conclusions as commentary.

What this means for you

General guidance, not personal financial advice. Consider talking with a HUD-approved housing counselor or a licensed professional about your own situation.

If you are a prospective buyer

• Build a complete monthly budget, including groceries, fuel, insurance and debt payments, before deciding on a price range. A lender's maximum approval is not the same as a payment that is comfortable in your life.
• Keep a cash reserve after closing. A purchase that leaves nothing in savings is fragile if prices or income move.
• Pay attention to debt-to-income ratio and recent late payments, since both can influence loan options and pricing.
• Check current mortgage rates using the weekly Freddie Mac survey rather than headlines.

If you are a renter

• Look at the total cost of living, not just rent. A cheaper unit farther from work can lose its advantage if commuting costs rise with gas prices.
• Ask about renewal terms early and compare them with moving costs before assuming a new lease is cheaper.
• Prioritize an emergency fund over a down payment if you have neither, since a missed rent payment can be more damaging than a delayed purchase.

If you are a seller or owner

• Expect buyers to be payment-sensitive. Pricing near comparable sales and keeping the home in good condition tends to matter more when budgets are tight.
• Owners with a low fixed rate may have little reason to move, but should still account for higher insurance, tax and maintenance costs in their budget.
• If you are considering selling to ease financial pressure, compare net proceeds with your replacement housing costs before deciding.

What to watch next

A few indicators will show whether the squeeze eases or deepens:

1. Monthly CPI releases from the Bureau of Labor Statistics, especially food, energy and shelter categories.
2. Real wage growth, meaning pay after inflation, which determines whether paychecks are catching up.
3. Retail earnings, including whether same-store sales at big-box chains keep slowing and whether lower-income shoppers keep pulling back.
4. Household credit data, such as delinquency and BNPL trends in Federal Reserve reports.
5. Weekly mortgage rates from Freddie Mac and local rent trends.

For the macro backdrop, see our look at recession warning signs in 2026 and housing as a companion read.

The bottom line is straightforward: housing affordability is not only about home prices and rates. It also depends on what is left of a paycheck after everything else is paid. When essentials absorb more of that paycheck, the housing market feels it, first in who can buy, then in how renters and owners adjust.