That’s a wrap on 2020 — the year we baked bread and stopped wearing jeans. Zoom became the app of the year. The US unemployment rate reached 14.7%, the highest it’s been since the Great Depression. Mortgage rates hit record low after record low, and airlines and cruise lines lost out on billions of dollars in revenue. Meanwhile, stuck-at-home Americans spent more on cleaning products, online shopping, and coffee, and cut back on makeup and SPF.
But with millions of vaccine doses on the way, 2021 will bring its own changes to Americans’ spending habits and the price adjustments to match. From rewatching Schitt’s Creek to sending a letter, here’s everything that may cost you more this year:
2020 saw the travel industry desperate to earn consumer dollars, with hotels offering steep long-stay discounts to work-from-hotel guests and airlines rolling out BOGO flight deals. As more vaccinated passengers take to the skies, prices will naturally take off, too. Travelers are already booking stays in places like the Caribbean and Mediterranean and driving up prices, but other itineraries have yet to see a spike in demand or costs. Airlines hope to see demand return to 50% of what it was in 2019 by summer, and major cruise lines hope to set sail again by March. But with so much uncertainty still clouding vacation plans, would-be travelers are delaying booking trips until closer to their departure date. Flights now are still selling for about 30-35% less than they did a year ago, and travelers might catch another windfall from new pandemic-friendly policies, like flexible cancellation rules and zero-dollar change fees.
Anyone studying 2020 rent trends might write the year off as uneventful. In the 100 largest US counties, median rent rose a predictable 1% for a one-bedroom and 2.3% for two-bedroom units. What actually emerged was a tale of two very different types of cities. Expensive coastal markets saw demand plummet as the workforce transitioned to WFH. The average cost for a two-bedroom in San Francisco has dropped nearly 27% since March, from $3,147 to $2,305. Similar units in Seattle, Boston, and New York can now be leased for about 20% less. Conversely, affordable, mid-size cities have gotten more expensive. Rent in Boise shot up 10%, and cities like Toledo, Albuquerque, and Memphis saw similar price hikes. What’s more, prospective renters may find better deals in Manhattan than Jersey City. While rent in suburban cities rose 0.5% in 2020, rent in principal cities fell 9.3%. TBD on how the return of vaccinated workers to offices will stymie these trends, but with more companies embracing WFH-forever, new rent prices in your area may be taking up permanent residence.
- Retirement: 46,000 US companies cut 401(k) contributions in 2020, while Social Security recipients will get only 1.3% more this year. (Many say the modest cost-of-living adjustment isn’t enough to cover retirees’ total expenses.)
- College: Covid-19 couldn’t stop tuition costs from rising 1.1% at public colleges — but the slight uptick represents the lowest percentage price increase in three decades.
- Entertainment: ICYMI Netflix started charging you a buck or two more late last year, and Disney+ will cost $1 more for a monthly subscription starting in March.
- Food: US groceries got 4.1% more expensive in 2020 (the steepest increase in 50 years), and restaurants may increase prices too to recoup their lockdown losses.
- Mail: USPS will charge you 1.8% more to send first-class mail and 1.5% more for all other parcels. In better news, a forever stamp will still only set you back $0.55.