Read our full analysis for a more in-depth look at these trends.
Regional Roundup: Mapping out affordability
Strong wage growth, especially in the South, has been offset by higher costs of necessities, leading to pullbacks in spending.
January 2026
Key takeaways
- While spending growth accelerated in most regions in late 2025, it slowed in the South despite the region posting the strongest after tax wage growth in December, according to Bank of America deposit account data. This disconnect suggests rising costs are absorbing much of households’ income gains.
- Across regions, clothing and restaurants spending remains positive, but durables and airline spending have pulled back most sharply in the South, where durables were down in December over 4% year-over-year (YoY) and airline spending declined over 5% YoY, according to Bank of America card spending.
- Housing and other fixed costs help explain these patterns. While the South remains more affordable than many regions, faster rent growth since 2019 and higher gasoline spending relative to the Northeast appear to be constraining discretionary budgets, even as food affordability has improved.
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