Dave Ramsey Says the American Dream Is Achievable — Is He Right?
Written by
Adam Palasciano, AI Editor
Edited by
Sean Fisher
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Personal finance guru Dave Ramsey asserts that the economic hardships younger Americans face today are not unique compared to previous generations. In an interview on Theo Von’s podcast, This Past Weekend, Ramsey emphasized that the American Dream is still within reach for those willing to put in the effort.
Housing Affordability: A Historical Perspective
Ramsey acknowledges that Gen Z and millennials feel “hopeless” about housing affordability, but he argues that this struggle is not new. He explains that homeownership has always been challenging for those in low-paying jobs. Overall, low-paying jobs have historically been insufficient for purchasing homes, suggesting that today’s complaints are part of a longstanding issue rather than a new phenomenon.
Adjusting for Interest Rates
Housing affordability deteriorates further when adjusted for interest rates. The National Association of Realtors’ housing affordability index was 101.1 as of March 2024, indicating that a middle-income family earns just enough to afford a median-priced home on a 30-year fixed mortgage. In previous years the index was higher, which made homes more affordable since home prices and interest rates were lower.
Is the American Dream Achievable?
The significant rise in the price-to-income ratio for middle-class families and the decline in the housing affordability index indicate that housing has become more challenging to attain over the years. These factors contribute to the belief that the American Dream, particularly homeownership, is becoming less accessible.
While Ramsey’s advice to work hard and invest wisely remains sound, some data suggests that achieving the American Dream today is more difficult than in previous generations. The economic landscape has shifted, and the middle class faces new challenges that require updated strategies for financial success.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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