Is the American Dream Dead? Why Young People Can't Buy Houses

Homeownership for Young People in 2025 — A REALTOR®’s Perspective

If you’ve been scrolling through social media lately, you've probably seen the same headline rehashed over and over:

“The American Dream is Dead!”

And if you’re a young adult looking to buy your first home, that phrase might feel a little too real. As a REALTOR®, real estate investor, and fellow young person, I hear the frustration every day from millennials and Gen Z buyers: “We did everything right — saved money, built credit, cut back on spending — and still can’t afford to buy a home.”

So let’s talk about it honestly: Is the American Dream — at least the homeownership part — really dead?

Well, not exactly. But it’s definitely been redefined.

📉 What’s Changed — And Why It Feels Impossible

1. Home Prices Have Outpaced Wages

This is the biggest obstacle. According to recent data, home prices in many cities have doubled or tripled in the last decade, while wage growth has remained flat. In other words:

• Your parents bought a house in the '80s or '90s on one income.

• You’re trying to do the same — with two incomes, a side hustle, and still falling short.

Even entry-level homes in some markets now require six-figure down payments, which is simply unattainable for many young buyers without outside help.

2. Interest Rates Are High (Again)

For years, we got used to 2–4% mortgage rates. Those days are over. As of 2025, rates are hovering around 6–7%, which means:

• A house you could afford two years ago now comes with a significantly higher monthly payment.

• Even if you qualify for a loan, the numbers don’t always work out when you factor in insurance, taxes, and rising maintenance costs.

  
  

3. Inventory Is Tight

There’s a serious shortage of starter homes. Baby boomers are staying in their homes longer, investors are holding onto rental properties, and new construction hasn’t kept up with demand — especially in cities. People who did score a low interest rate are hesitant to give it up, even if they're no longer happy in their home.

This means competition is fierce, cash buyers are common, and bidding wars are still happening, even in a slower market.

💬 What Young Buyers Are Saying (And Feeling)

I've talked to a lot of young couples, single professionals, and first-time buyers — and the same themes come up again and again:

• “Am I doing something wrong, or is the system broken?”

• “My rent keeps going up, but I can’t find anything I can afford to buy.”

• “My parents bought a house when they were 25 — I’m 32 and still renting with roommates.”

  
  

This isn't just financial — it’s emotional. For many people, owning a home isn’t about square footage. It’s about security, independence, and feeling like you’ve made it. When that feels out of reach, it hits hard. You see everyone else (seemingly) buying homes and living their best life, yet you wonder why it feels so impossible for you to do it too.

🧭 So... Is the Dream Dead?

No — but it’s definitely evolving.

❌ The Old Dream:

• 2,000+ sq ft.

• Detached suburban home with a big yard.

• Bought in your mid-20s.

• 30-year mortgage with a white picket fence.

• Only need one income to pay the bills

  
  

✅ The New Reality:

• Condos, townhomes, or multi-family properties.

• Purchased in your 30s (sometimes 40s).

• Co-buying with friends or partners.

• Focusing on equity building, not just “forever homes.”

• Learning to get creative with your investment

  
  

It’s not worse — it’s just different. The timeline has shifted, and the definition of success is broader now.

🛠️ What Can You Do? (From a REALTOR® Who Gets It)

If you’re feeling hopeless, you’re not alone. But I promise you: there are still paths to home ownership — they just might look different than what you expected.

Here’s my honest advice:

1. Broaden Your Search

Don’t fixate on the “dream neighborhood.” Look at nearby areas, condos, or fixer-uppers. Don't get caught up on it being your forever home. You can always move up later — the first home is about getting in the door.

2. Partner With the Right REALTOR®

Don't try to jump into the housing market alone. REALTORS® are real estate professionals who are experts in their market and niche, but they are not all made alike. Find one who understands your budget, your goals, and your limitations. A great agent will advocate for you, not just try to make a sale.

3. Get Creative With Financing

Explore FHA, VA, USDA, or first-time buyer programs. Look into co-buying, down payment assistance, or even rent-to-own models. There are more options than you think. If you aren't sure where to start, your REALTOR® can connect you with a recommended lender.

4. Play the Long Game

Sometimes the best move is to wait a little — keep saving, build credit, and be strategic. Timing matters. You’re not a failure if you’re not buying right this second. In fact, renting can be the "smarter" option in many cases. Home ownership has many benefits, but oftentimes the costs and stress can outweigh the good for someone who is unprepared.

💬 Final Thoughts: It’s Okay to Feel Discouraged — But Don’t Give Up

The American Dream of homeownership isn’t dead. But it’s not handed to you anymore — it’s earned through persistence, patience, and planning. I won’t lie — it’s harder than it used to be. But even in this market, I can help make it happen. And if you’re willing to adapt, stay informed, and move smartly, you can own a home — maybe not today, maybe not this year, but sooner than you think.

And when you do get the keys? It will be a whole new dream.

Curious to see if you're ready to buy a home? Reach out to me today for a free consultation!