The Biggest Inflation Problem In America Might Not Be Where You Think
Inflation is a sticky dilemma affecting everyone in the country. However, it does not affect everyone evenly. High cost of living cities like New York and San Francisco spring to mind as areas most affected. According to WalletHub's new inflation analysis which looked at the consumer price index in various metropolitan statistical areas (MSA), the area most impacted by inflation over the last year was the San Diego-Carlsbad MSA, a Southern California region with a population of 3.28 million encompassing San Diego, Carlsbad, Chula Vista, and Oceanside, among other cities.
The analysis used data from the Bureau of Labor Statistics and specifically looked at the consumer price index between September 2024 and 2025, which sat at 3% and was higher than the Federal Reserve's target of 2% year-over-year inflation. In the 12 months prior, the San Diego-Carlsbad MSA experienced a consumer price index change of 3.90%, nearly double the Fed's target.
Why San Diego-Carlsbad's consumer price index outpaced the national average
Inflation is affected by a multitude of factors, including the supply and demand of goods and services; and more recently, price hikes due to tariffs, whose costs are passed down to consumers, as well as increases in production costs. Combined, these factors increase the cost of living for individuals, but their effects on inflation vary from region to region. In the San Diego-Carlsbad region, some of the biggest contributors have been housing costs and rising wages.
The cost of housing, for example, is 112% higher than the national average. The city has a high demand for rentals in particular but not enough supply. According to a recent Rent Cafe study, 95% of apartments in the city were occupied in 2024. When paired with the competitive housing market, it helps explain why the median home sells for $935,000 and the average apartment rents for $3,000 a month. At the same time, wages increased from $36.54 to $37.85 between 2023 and 2024. While this puts more money in the pockets of San Diego-Carlsbad residents, it also allows companies to charge more for goods and services, bringing up inflation even more.