Egg prices are not the only thing pressuring household budgets. Something even more essential is creating the latest inflation headache: water.
The latest Consumer Price Index report showed the cost of water, sewer, and trash collection services rose at an annualized rate of 4.9% in March versus an overall CPI increase of 2.4%.
The same trend was reflected in a recent Bank of America report, which showed median monthly water utility payments went up 7.1% year over year in March.
The jump in water costs for Americans comes as the Federal Reserve tries to return inflation to its 2% target, with newly announced tariffs from the White House further muddying the outlook for the US economy.
Between aging US water infrastructure and newer standards to rid water of harmful chemicals, a reprieve in US water bill increases doesn’t appear likely anytime soon.
“I think we’re seeing a little bit of rate shock right now in the short term to address … some of the new [water] treatment standards that have passed in the last couple of years,” Tricia Anklan, partner at West Monroe, a water utilities and electric consulting firm, told Yahoo Finance.
“It’s a major infrastructure investment,” she added, referring to new treatment systems aimed at complying with 2024 Environmental Protection Agency rules that limit “forever chemicals,” also known as PFAS.
Meanwhile, the cost to clean wastewater has gone up “even more quickly” than transporting and treating water from nearby lakes.
Uncertainty over tariffs may also increase costs in the near term.
“A lot of the chemicals that are used in the water treatment process come from outside of the United States,” Anklan said. “With the uncertainty about tariffs, those could have a downstream increase on our costs.”
A 2025 report card conducted by the American Society of Civil Engineers gave the US drinking water infrastructure a C+ grade, as federal investments in the tens of thousands of US water systems have tapered over the past 40 years, placing more responsibility on municipalities and states.
“Water infrastructure has been historically underinvested in,” said Travis Loop, founder of waterloop.org and former communications director for the EPA.
“It’s very old aging crumbling infrastructure in a lot of cases, and that bill is coming due,” Loop told Yahoo Finance.
Bank of America’s report showed that higher-income households saw the biggest quarterly increase in water costs last year, likely due to their larger property sizes and greater water usage.
