Is the American Dream Still Affordable for the Middle Class? Experts Weigh In
Written by
Cara Danielle Brown
Edited by
Amber Barkley
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The American Dream, defined as a cultural belief that upward mobility is possible for everyone regardless of race, religion or creed, has often been depicted as owning a home in the suburbs with two kids and a fluffy dog. And, for years, the middle class was considered the lasting symbol of the American Dream.
But, with the middle class dwindling and the cost of living skyrocketing, one can’t help but ask: Is the American Dream still affordable for the middle class?
GOBankingRates consulted financial experts and found the answer to be… a complicated yes. The American Dream is still affordable for the middle class, but it’s become much more difficult to achieve.
Why Has the American Dream Gotten Harder?
It’s often said that wages have stagnated, but, according to Andrew Latham, CFP and content director at SuperMoney, that’s not entirely accurate.
Lathan said that, in 1970, only 16.2% of American households had earnings between $100,000 and $200,000. Today, adjusted for inflation, 26.5% of households are in that bracket. Conversely, in 1970, 29.6% of households earned at or below $35,000; today, adjusted for inflation, only 21% of households remain in that bracket.
Wages May Have Increased, but Costs Have Increased More
“Wages have generally kept up with, and at times outpaced, inflation,” Latham said. “So, in broad terms, real earnings have improved over the decades. But that doesn’t tell the full story. The issue is that several core pillars of the American Dream, such as housing, college education and healthcare, have far outpaced inflation and wage growth.”
Of the aforementioned pillars, Latham cited housing as the chief issue: “The American Dream is still possible, but the front door got a lot more expensive. If your dream includes homeownership […] many in the middle class need a second job to make it a reality.”
What Factors Make the American Dream More Attainable?
Given the cost of housing, Herman Thompson, Jr., CFP at Innovative Financial Group, said the American Dream being affordable for the middle class could come down to where one lives.
“The American Dream for the middle class in San Francisco, California may be out of reach,” Thompson explained.
He pointed out the disparities in home prices and average salaries in San Francisco compared to Macon, Georgia: San Francisco homes cost a median $1.2 million, while the average salary is around $95,000. In Macon, the average salary is a little over $53,000, and the median home price is around $200,000.
Some Sacrifice May Be Necessary
Erica Sandberg, consumer finance expert at CardRates.com, explained the American Dream nowadays is doable for the middle class but comes with certain sacrifices, like living more frugally and waiting a longer amount of time to achieve it.
“If people want to purchase a house, they may have to wait and save longer than their parents,” Sandberg said.
They may also have to cut back in other areas.
“Basic to luxury vacations are available, so people can choose from the type that’s within their means,” she explained. “In many U.S. cities, dining out has become more expensive, but with judicious decisions, most people can still fit restaurants into their budget, at least occasionally.”
Make a Financial Plan
And since many considerations are necessary in one’s pursuit of the American Dream, Glenn Williams, CEO at Primerica, stressed the importance of having a financial plan.
“Financial education and access to trusted professional advice have never been more important,” he said. “In times like these, every financial decision matters. A well-informed plan can mean the difference between treading water and moving forward.”
Editor’s note: Median home prices were sourced from Realtor.com. Average salaries were sourced from ZipRecruiter. Data is accurate as of May 1, 2025.
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Sources
- Andrew Latham, SuperMoney
- Herman Thompson, Jr., Innovative Financial Group
- Erica Sandberg, CardRates.com
- Glenn Williams, Primerica
