The American Dream Dies With Homeownership in US

Homeownership in the United States has long been considered "a key component" of the American Dream - a symbol of both financial success and independence, as a J.P. Morgan Wealth Management strategist noted in December 2023.

The prior year, a study commissioned by Bankrate.com indicated that 74% of U.S. adults ranked homeownership higher than the ability to retire, having a successful career, owning a vehicle, having children, or graduating college. Yet, as high house prices and mortgage rates continue to outpace inflation, the cost of buying a home is increasingly higher than renting.

According to an Economist calculation in November 2023, the cost of renting a two-bedroom property for 89% of Americans is now cheaper than if they were to buy it.

And this trend is expected to continue as housing affordability for first-time homebuyers in the U.S. struggles to overcome last year's record lows. Indeed, the 2024 Rental Affordability Report released by ATTOM last month reported that "median three-bedroom rents in the U.S. are more affordable than owning a similarly-sized home in nearly 90 percent of local markets around the nation."

As the prospect of owning their own homes becomes an ever more distant reality for a growing number of Americans; and renting becomes less of a second-best and more of a social norm, homeownership as the height of the American Dream realization barometer seems more nostalgic than reality.

The Death of the American Dream

The roots of this idealization of homeownership in the context of the American Dream have sprung from the core American values of individualism, independence, and privacy-the idea that one's home is one's "castle," a fortress to defend one's life, liberty, and property.

It hearkens back to the early Anglo-American jurisprudence on which the Fourth Amendment to the Constitution was written to protect the "right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures."

There are also some parallels here to medieval English common law on which U.S. Castle Doctrine is based, which gives a person the legal right to defend their figurative castle. Over time such doctrine has coalesced with American gun culture, and along with it, a sense of "I'll give you my castle keys when you pry them from my cold, dead hands" has emerged.

It's as American as apple pie, right? Perhaps. In a democracy such as this one, though, no sovereigns are ruling over us from their castles here or abroad. There's not been a king of this land since 1776, when the U.S. declared independence. These people have an aversion to such subjugation, and it would behoove any would-be kings to remember the fate of the last one, Mad King George III.

The American Dream Goes Down With Homeownership in US

The reality of today's American Dream is that it's just not all that dreamy for a significant number of Americans.

It is a wishful construct of our imaginations that grows further from reality by the day for many more of us than not. As does the possibility of ever achieving the fattest slice of this American Dream pie, owning one's own home.

Regardless of the many benefits of homeownership to citizens and society, the stark reality today is that the path to owning a home for the average American is an ever more difficult one.

Shortages of new housing, high prices on existing properties, rising mortgage rates, and inflation are partly to blame. But the other thing-the thing that those from the lofty heights of their pretend "castles" are loathe to discuss-is the disparity in housing security across racial and ethnic groups in America.

What's Next?

And such disparity shows no signs of improvement. The National Association of Realtors reported in March 2023 that people of color in the U.S. were facing "major homebuying challenges."

Likewise, in December, the Washington Post reported a widening, and potentially worsening, racial homeownership gap due to new rules requiring "banks to hold on to more capital for residential mortgages."

The prospect of achieving the homeownership part of the American Dream is thus further from reality for some groups of Americans-primarily those of color-than ever. Indeed, a February 1st McKinsey Institute for Black Economic Mobility study found that it could take more than 300 years at the current rate for Black Americans to achieve "racial parity" in terms of housing equality.

300 years-three centuries-is more than half-century longer than America has existed as a republic. If this is what the American Dream has become, a progressively unattainable illusion, then it should be redefined as such. "As American as apple pie, but like, only for some Americans." Or, "American Dream*Not all will qualify for the best parts in this century. Or the next. Or the one after. (LOL)."