The Tax-Plus-Insurance Wedge: How Non-Mortgage Carrying Costs Became the Marginal Variable in American Housing
For three decades, U.S. housing affordability was discussed primarily in terms of price and mortgage rate. In 2026, the marginal variable that determines whether a household can afford to stay in their home — or whether a prospective buyer can afford to enter the market — is no longer the mortgage payment. It is the wedge of non-mortgage carrying costs: property tax, insurance, and HOA fees. The wedge has grown wider than the headline mortgage payment in many metros, it has compounded faster than wages for five consecutive years, and it operates as a Fekete-an extraction that the household cannot directly negotiate. This essay maps the wedge, identifies its political-economy drivers, and reads its trajectory through the New Austrian framework.