The US Economy in 2024: How Much More Will You Need This Year Just to Afford the Basics?

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The rising cost of living has been hurting many American’s budgets, and it may not get much better in 2024. Though overall inflation has cooled off slightly from the 9% peak in summer of 2022, consumers will still face rising prices on everyday essentials like housing, food, transportation and more.

This means you’ll need more cash on hand just to cover the basics — but exactly how much more? While prices depend on where you live and what you’re buying, here’s how much more you’ll roughly need in 2024. 

Housing

Housing remains the biggest strain on many people’s budgets — thanks to low inventory and high mortgage rates. 

While the housing market is expected to ease slightly in 2024, you should still expect to see prices rise for both renters and buyers. 

Recent data predictions rent prices in the top 100 markets will see a 3.9% increase in 2024. So if your current rent is $1,700, you could expect to pay around $64 more per month or $768 more for 2024. The National Association of Realtors expect median home prices to rise 1.4% in 2024 to $395,100. 

Food

The Economic Research Service (ERS) of the United States Department of Agriculture (USDA) predicts an up to 4% increase in grocery prices this year, slightly lower than last year’s increase of 5%.

The average family spends $270 weekly on groceries. Based on these predictions, they can expect to pay around $281 in 2024 for the same grocery haul. That adds up to $572 more in annual spending on groceries. 

How much more you pay does depend on the type of groceries you buy. Beef and egg prices are expected to rise the most in 2024 (up to 15.7% and 15.4%, respectively). 

The ERS predicts that prices on food away from home — restaurants and takeout — will rise up to 6.2%. Someone who spends $300 on eating out each month would need to spend $319 for the same amount, or around $228 extra per year. 

Transportation

One silver lining? You may be paying less for gas in 2024. GasBuddy predicts gas prices will drop to $3.38 a gallon in 2024, down from $3.51 in 2023. 

In total, you can expect to pay at least $1,568 more than last year for essentials, or at least $127 for extra outlays every single month. Of course, this largely depends on where you live — Hawaii, Massachusetts, California, and New York have the highest costs of living. 

The good news — we likely won’t see the price increases we saw in 2022. But preparing your money now can help you avoid sticker shock down the road. 

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