FILE - A sale sign stands outside a home in Wyndmoor, Pa., Wednesday, June 22, 2022. Achieving the “American Dream” is getting harder to reach as prices have outpaced increases in wages for most Americans that are struggling to keep up with bills and preventing them from saving for a house or retirement, fueling concerns that they may never get to achieve some of the core life milestones that are expected for a person living in the U.S.
What income is required to be considered middle class has also gone up over the last decade. In 2012, a household income of $35,364 was considered to be a middle-class lifestyle, but that figure has increased to $50,099 as of 2022,. The upper end of middle-class has also shifted, increasing over 41% since 2012 up to $150,298.
Home values exploded during the pandemic when interest rates for a mortgage were 3% or less, expanding the purchasing power for people looking to buy a house and making the pool of buyers larger, which increased competition for a limited number of homes that sent prices upward. While mortgage rates have gone up since then, the cost of homes isn’t falling despite less activity in the market.
“Owning a home is still the centerpiece of the American Dream but affordability is the main obstacle to making that a reality," said Bankrate chief financial analyst Greg McBride. “Aspiring homeowners point to the combination of insufficient income, high home prices, and not having saved enough for the down payment and closing costs as the dominant pain points.”
Childcare costs can be prohibitive in some areas for people to start families and has been a growing issue for lawmakers in Congress trying to figure out how to help ordinary Americans continue to achieve the American Dream.