Real gross domestic product increased at an annualized rate of 1.6 percent in the first-quarter from the previous period, the seventh consecutive quarter of growth. In particular, services consumption rose 4 percent.
Persistent inflation
The strong economy has led to persistent inflation. The year-on-year rate of increase in the consumer price index, which indicates price trends, has not fallen below 3 percent since June 2023. It rose 3.4 percent in April from a year earlier, only slightly below 3.5 percent in March.
Companies, especially in the service industry, have continued to raise wages with higher labor costs reflected in prices. The Federal Reserve's 2 percent inflation target is currently out of reach.
Interest rates affect housing market
At the same time, interest rates have risen, and higher mortgage rates have had a profound effect on the housing market.
The interest rate for a 30-year fixed mortgage was in the 2-percent range during the coronavirus pandemic. But this month, it has been around 7 percent, according to Freddie Mac, a government-affiliated housing finance agency.
About 70 to 80 percent of homes sold in the US are existing properties. Many people who purchased at low mortgage rates in the past are reluctant to move because it would mean taking on a loan at a higher rate. This has limited the supply of homes on the market.
For developers, rising interest rates have increased the cost of borrowing funds to build. Rising costs of materials and labor are also putting the brakes on construction, leading to a significant shortage of new homes.
The combination of factors has increased demand for rental properties, leading to higher rent prices. The rate of increase in housing costs, including rent, has been cooling from last year's peak of 8 percent, but remains stubbornly high. It edged down to 5.5 percent in April from 5.7 percent in March.
Homelessness hits an all-time high
The end result is that more than 650,000 people across the US have found themselves homeless.
In Florida, where rents are comparatively high, tenants needed to earn about 30 dollars per hour to afford an average two-bedroom rental house in 2023, according to the National Low Income Housing Coalition.
Organizations that support people experiencing homelessness are being inundated with requests for help as their numbers grow. Among them are this couple, who did not share their names with NHK.
They moved to Florida from North Carolina. The wife, who is in her 20s, says she worked at a fast food restaurant before she relocated for school.
But they could not afford rent, their car broke down, and they were forced to live in a tent under a bridge. So they visited the Christian Service Center for Central Florida to ask for help.
The wife says that the rising cost of housing is among the most difficult challenges they face.
"The cost of living keeps going up and the wages aren't matching with anything," she says.
Her husband, who is in his 30s, said that a regular two-bedroom apartment was around 850 dollars a month in North Carolina, while a comparable unit rents for 1,800 to 1,900 dollars in Orlando.
The number of people experiencing homelessness exceeded 650,000 during 2023. That represents a 12 percent jump from the previous year and the highest number since the US government began collecting data in 2007.
'Nightmare situation'
Eric Gray is executive director at the Christian Service Center for Central Florida, a long-standing local organization that helps people experiencing homelessness. He says that the rising cost of housing is a serious problem with a wide reach.
Gray says that people without a place to call home are sometimes working full-time jobs.
"They are lawyers, they are nurses, they are theme park workers. They are working in grocery stores, they are landscapers, they are engineers, and you would never know because they don't want anybody to know that this is what's happening. And they're trying to find their way out of the situation quickly."
He calls the current climate "a nightmare situation," and calls for action.
"We have to build more affordable housing," he says. "And we have to build more shelter in order to help people during this tragedy that we are going through."
