American Dream now costs $4.4M; homeownership remains key goal

Dan Seiffert SVP, Accounting | realtors.com

The cost of living the American Dream has risen to $4.4 million, according to a report by Investopedia. This figure represents the estimated lifetime household expenses for typical milestones such as marriage, raising children, buying a house, and saving for retirement. Homeownership accounts for nearly a fifth of this total.

Investopedia's findings indicate that housing is the second-largest expense in achieving the American Dream, with only retirement costs surpassing it at $1,599,995. The average cost of purchasing and financing a home with a 30-year fixed-rate mortgage is approximately $929,955. This estimate includes home insurance and property taxes but excludes maintenance and HOA fees.

A survey by Realtor.com found that despite financial challenges, 75% of Americans still consider homeownership central to the American Dream. However, only 59% believe it is an achievable goal. Laura Eddy from Realtor.com stated that many Americans view owning a home as essential for creating long-term wealth.

Generational differences exist in attitudes towards homeownership. While 84% of baby boomers see it as crucial to achieving the American Dream, younger generations are less enthusiastic.

The recent election of Donald Trump for a second term has led to mixed reactions regarding its impact on the housing market. Some prospective buyers hope Trump's background in real estate will improve market conditions. Cara Ameer from Coldwell Banker noted optimism about potential easing interest rates under new leadership.

However, high interest rates remain a significant barrier for buyers. Realtor.com economists predict that 30-year fixed mortgage rates will average around 6.3% through 2025. Ameer observed that buyers have become more selective due to these rates.

There is also uncertainty about how Trump's policies on tariffs and deportations might affect the homebuilding industry. Joel Berner from Realtor.com expressed concerns over rising construction costs due to these policies during a time when new homes are needed across the country.