The American Dream now carries a staggering $4.4 million price tag, marking an increase of over $1 million in just one year. For many, this number is more than they’d hope to earn in a lifetime.

One of the biggest contributors to this soaring cost? Homeownership, which now makes up nearly 20% of the total expense of achieving this long-standing dream.

Breaking Down the Cost of the American Dream

According to Investopedia, this $4.4 million figure represents the estimated lifetime cost of major milestones, including:

• Buying a home
• Getting married
• Raising two children
• Saving for retirement
• Owning pets
• Taking annual vacations
• Driving only new cars
• Planning for a funeral

While these costs have all increased, housing remains one of the largest financial hurdles for Americans striving for financial stability and wealth creation.

The Rising Cost of Homeownership in the U.S.

For decades, owning a home has been a core part of the American Dream, yet skyrocketing prices and higher mortgage rates have made it increasingly difficult to attain.

Investopedia’s recent report found that housing is the second-largest expense, making up more than 20% of the total cost—only trailing behind retirement, which is projected to cost a staggering $1.6 million over a lifetime.

How Much Does Buying a Home Cost in 2024?

• The average cost of buying and financing a home with a 30-year fixed mortgage has surged to $929,955.
• This estimate excludes maintenance costs, HOA fees, and renovations.
• It does include expenses like property taxes and home insurance.

For comparison, in 2023, the total cost of the American Dream was estimated at $3.4 million, with homeownership accounting for $796,998—meaning this expense alone has jumped by more than $130,000 in just a year.

U.S. Homeownership Trends

• The current homeownership rate in the U.S. is 65.6%, according to the U.S. Census Bureau.
• This is down from the 2004 peak of 69.2% but an improvement from the 2016 low of 63.4%, which followed the foreclosure crisis and Great Recession.

Is Homeownership Still Part of the American Dream?

Despite rising prices, 75% of Americans still believe owning a home is a crucial part of the American Dream, according to a Realtor.com survey. However, only 59% believe it’s actually achievable.

“While affordability and inventory challenges make homeownership more difficult, many still view owning a home as essential to achieving long-term wealth,” says Laura Eddy, VP of Research at Realtor.com.

Generational Divide in Homeownership Sentiment

• 84% of Baby Boomers see homeownership as a key milestone in the American Dream.
• Younger generations are less enthusiastic, with Gen Z being the least confident about achieving it.
• Nearly 2 out of 3 respondents still consider buying a home a life goal.

Will a ‘Trump Bump’ Revive the Housing Market?

The re-election of Donald Trump has sparked debates about its potential impact on housing affordability.

Some experts speculate that Trump’s real estate background could lead to pro-housing policies, while others worry about rising construction costs due to tariffs and immigration policies.

Potential Housing Market Changes Under Trump

• Mortgage rates: Realtor.com economists predict 30-year fixed mortgage rates will average 6.3% through 2025, with a year-end projection of 6.2%.
• Buyer sentiment: Many prospective homebuyers are hopeful that interest rates will ease under new leadership.
• Market trends: Coldwell Banker broker Cara Ameer notes that buyers are becoming more selective, waiting for better deals or lower rates.

“Buyers have interest rate fatigue. Some are adjusting to the ‘new normal’ and purchasing within their means, while others are stuck renting, unable to break the cycle,” Ameer explains.

Challenges Ahead for Homebuilders

Realtor.com Senior Economist Joel Berner warns that Trump’s trade policies and immigration stance could increase home construction costs.

“Tariffs and mass deportations could raise labor and material costs at a time when the U.S. desperately needs more housing,” Berner says.

Final Thoughts

The cost of the American Dream is at an all-time high, and homeownership is a major factor in this growing financial burden. While many Americans still see homeownership as a crucial goal, the rising costs and economic uncertainty are making it harder to achieve.

With mortgage rates expected to hover around 6.3% in 2025, the housing market remains in flux—and only time will tell whether a ‘Trump Bump’ will bring relief to aspiring homeowners.

Last modified: February 17, 2025