The Rising Cost of Living the American Dream

Introduction

The Struggle of the American Middle Class

The cost of living in America has been increasing at a much faster rate than the average income. This has resulted in millions of Americans, who were once thriving, now facing severe financial struggles. The once attainable "American Dream" is now out of reach for most of the population. The basics of a middle-class lifestyle have become unaffordable, leading to a rise in poverty and homelessness. The economy has become the primary issue during this election cycle, with many longing for a return to better times. Unfortunately, due to the decisions made by our leaders, this seems unlikely.

The Cost of the American Dream

Living the American Dream: A Costly Affair

A recent report reveals that it now requires over $100,000 a year for a typical family to live "the American Dream" in all 50 states. In 29 of these states, the cost exceeds $150,000 a year. The report, published by personal finance site GOBankingRates, states that the optimal American lifestyle would cost $137,842 a year in Ohio, $147,535 in Texas, $159,932 in Florida, $194,067 in New York, and $245,723 in California.

Snapshot of the Average U.S. Household

A look at Illinois, ranked 26th on the list, gives a good idea of what the average U.S. household is grappling with. The total annual costs, including median home price, childcare, mortgage, car, grocery, healthcare, utilities, education, and pet costs, amount to $78,369. The full cost of living the American Dream in Illinois is estimated at $156,739.

The Lifetime Cost of the American Dream

Investopedia released a report last December, estimating the lifetime cost of living the American Dream at $3.4 million. This figure is staggering, considering that the average American earns about $2.3 million in a lifetime.

The Housing Crisis

The Escalating Home Prices

Housing costs are the primary reason why the American Dream is now unattainable for most of the U.S. population. During the pandemic, home prices skyrocketed, with the median sale price for an existing home rising more than 40% between early 2020 and mid-2022. This increase brought the price to just over $400,000, according to the National Association of Realtors.

The Rising Mortgage Rates

Alongside the rise in home prices, mortgage rates have also soared to painful levels. The average rate on a 30-year fixed mortgage, which was just over 3 percent at the beginning of 2022, is now over 7.2 percent. The monthly payment on a 30-year fixed mortgage at 7.2 percent for a $400,000 home would be $2,715 a month, a sum unaffordable for most of the population.

The Declining Homeownership Dream

The increasing housing costs and interest rates have pushed the dream of homeownership further away for renters. A New York Federal Reserve survey reveals that the share of renters who believe they will someday be able to afford a home has dropped to a record low of 13.4%.

The Declining Confidence in Joe Biden

Low Confidence in Biden's Leadership

The struggle to afford the American Dream has led to a significant decline in the confidence that the American people have in Joe Biden. A recent Gallup poll shows that only 38% of Americans still have confidence in Biden to lead the country and do the right thing for America's economy. This figure is one of the lowest Gallup has measured for any president since George W. Bush took office in 2001.

The Demand for Change

With the American Dream becoming increasingly difficult to achieve during the Biden years, the American people are desperately seeking change. However, month after month, things continue to worsen. Decades of poor decisions have led us to this point, and turning things around will not be easy.

Conclusion

Thoughts on the Current State of the American Dream

The American Dream, once a beacon of hope and prosperity, now seems more like an unattainable fantasy for most. The rising costs of living, coupled with stagnant incomes, have made it increasingly difficult for the average American to live a comfortable, middle-class lifestyle. The current state of affairs raises several questions: Is the American Dream still achievable? If so, what needs to change to make it a reality once again? We invite you to share your thoughts on this topic and encourage you to share this article with your friends. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.