Freedom, liberty, opportunity, self-reliance, and independence...
These are the things we celebrate when we get together with our families and loved ones on the 4th of July. In that sense, the holiday embodies the American Dream — the idea that anyone who works hard and is determined can achieve success and move up in life.
And, of course, it's been a core tenet of American society for years.
But increasingly, it seems the glitter of the American Dream is fading for most Americans, especially the young. For instance, ahead of the Fourth of July, YouGov asked Americans about the meaning of the holiday and the American Dream.
The results were pretty disheartening, to say the least...
In response to the question, "Is there such a thing as 'The American Dream'?" one in three (30%) of 18-29-year-olds said, "No, there is not." Another 17% were unsure. That’s nearly half of the respondents who basically do not believe in the idea.
When I saw these results, my thoughts immediately turned to home affordability. After all, owning a home has always been a cornerstone of the American Dream — I'm sure you'll agree.
Now, we're all aware that home prices have been skyrocketing since the mid-20th century. That's not the real issue. The problem is that they have risen much faster than income levels. You can observe this dynamic in the next chart, showing housing affordability based on median salary since 1940.
With homes averaging $413,200 and two-earner U.S. households earning just over $75,000 annually, the income-to-home price ratio stood at a measly 18% in 2023. That’s far from the 58% peak in the late 1950s — and the lowest point in history.
Put another way, after decades of decline, home affordability was utterly decimated by the Fed’s unprecedented money printing during the pandemic and Bidenomics.
No wonder young people are losing faith in the American Dream.
Regards,
Lau Vegys
Asset price inflation coupled with rentier slumlords - shocked, I am shocked to discover there are failures in capitalism!
So, over half of the American youth are still in denial.