The American Dream Now Costs $4.4M—See How Much of That Pie Goes Toward Your Home

Living the American Dream now comes with a jaw-dropping price tag of $4.4 million, up more than $1 million from the year before—and owning a home accounts for nearly a fifth of that amount.

The shocking seven-figure sum—which is over $1 million more than the majority of Americans would hope to make in a lifetime—represents the estimated lifetime household cost of typical milestones, including getting married, raising two children, buying a house, and saving for retirement, according to Investopedia. 

Other big-ticket items on the American Dream priorities list include having only new cars, going on annual vacations, owning pets, and setting money aside for a funeral.

Homeownership in the U.S. has long been viewed as a lynchpin of achieving the American Dream, but the climbing costs associated with buying property have made reaching that pivotal goal much harder for many Americans.

Investopedia’s recent report found that housing was the second biggest expense associated with the price of the American Dream and accounted for more than 20% of the total cost, with only retirement surging ahead with an eye-popping $1,599,995 price tag.

The average cost of buying and financing a home with a 30-year fixed rate mortgage would set a homebuyer back some $929,955, based on data collected by Investopedia and published last fall. This figure does not include maintenance, HOA fees and other expenses associated with homeownership. It does, however, factor in home insurance and property taxes.

For comparison, according to Investopedia’s 2023 survey, the cost of the American Dream that year amounted to $3.4 million, with the cost of homeownership totaling a more modest $796,998. 

The current homeownership rate in the U.S. stands at 65.6%, according to the U.S. Census Bureau. That’s down from 69.2% in 2004 but up from the 63.4% homeownership rate low point in 2016 that came on the heels of the foreclosure crisis and the Great Recession. 

Dream of homeownership unites Americans

Despite the financial hurdles, the idea of homeownership as the focal point of the American Dream continues to be shared by 75% of Americans, according to a recent survey from Realtor.com ®.

Only 59% of respondents said that homeownership was an achievable goal in the U.S. 

“While current conditions around affordability and the availability of homes make ownership more challenging, many Americans still see that ideal of having a home that belongs to them as a key cornerstone of achieving both the American dream and creating long-term wealth for themselves and their families,” says Laura Eddy, vice president of research and insights at Realtor.com.

Nearly 2 out of 3 respondents consider homeownership one of their goals, while around 50% believe that owning a home is a necessary building block of long-term wealth.

The Realtor.com survey conducted shortly after the November 2024 presidential election also revealed major generational difference in people’s’ attitudes towards homeownership.

An overwhelming majority of baby boomers (84%) said that owning a home was a key part of achieving the American Dream, while the younger generations felt less enthusiastic about it. 

Overall, slightly more than half of Americans (59%) viewed homeownership as an achievable goal for them, with baby boomers being the most confident and, perhaps not surprisingly, Gen Z the least.  

Could a ‘Trump Bump’ save the American Dream?

The election of Donald Trump for a second presidential term has drawn mixed reactions from Americans in general and prospective homebuyers in particular.

Many are hopeful that Trump, who got his start as a real estate developer, would give the sluggish housing market the boost it needs by creating more favorable conditions for buying and selling homes.

“Post election, I am hearing optimism regarding interest rates with the belief they are going to ease,” Cara Ameer, a Coldwell Banker broker, tells Realtor.com in an email.  “As to why that is and the details behind it, the consumers I’m dealing with can’t really say other than feeling that new leadership in The White House is going to be beneficial to the economy. 

According to Ameer, high interest rates continue to present a major barrier for would-be buyers, and bringing those figures down is largely out of the president’s control.

“Buyers have interest rate fatigue and for some, they simply can’t or don’t want to wait any longer, having waited for rates to ease,” Ameer adds. “Some are simply adjusting to the new normal of rates and accepting what the reality is and buying what they can, but many others still feel that rates are too high and are caught up in a cycle of renting that they don’t want or can’t afford to break.”

Realtor.com economists have predicted that 30-year fixed mortgage rates will average around 6.3% through 2025 and end the year at 6.2%. The Fed is slated to announce where interest rates stand on Jan. 29.

According to Ameer, as a result of the higher rates, buyers have become “more selective.”

“There is less urgency to buy, so if a property doesn’t check all of their boxes, they are less willing to compromise, unless it is underpriced which is generating multiple offers,” she said.

On the other side, there is much uncertainty surrounding the possible impact of the president’s signature policities, namely, tariffs on foreign goods and mass deportations of undocumented immigrants, on the homebuilding industry.

“The tariff and deportation agenda the Trump administration has promised will certainly raise construction costs during a moment of great need for new homes—not only to replace the properties destroyed by these horrible wildfires in Southern California, but in the country at large where underbuilding has plagued for-sale inventory since the Great Recession,” says Realtor.com Senior Economist Joel Berner.