American dream 'not for everybody'

"The American dream is not for everybody, no matter how hard you work," declared Ian Bremmer, president and founder of Eurasia Group and GZero Media, in a recent podcast talk on The Ezra Klein Show, a podcast of The New York Times.

There are many definitions of the American dream. A house, white picket fence, cars, kids on bikes, a happy running dog, and roasted turkey on a Thanksgiving dinner table — those images conjure up the quintessential visual representation of the American dream.

Fundamentally, the American dream is an American national belief that everyone, no matter where one is from or what class one was born into, has the freedom and opportunity to work hard and attain prosperity, security and a better life.

Materially, it's marked by three milestones — owning a home, achieving financial security and providing children a better future.

Much data supports Bremmer's assessment that the American dream is much more difficult to attain today. When it comes to home ownership, it's out of reach for 60 percent of the population.

Housing is much less affordable

Data from government agencies and professional organizations such as the National Association of Realtors (NAR) showed that, compared to three decades ago — roughly one generation — a single-family house's median price was $114,600 nationwide, roughly 3.2 times the then-median household income of $32,112.

Today, the median price is as high as $446,400, about five times today's estimated median household income of $89,000.

Andrew Skar, a Houston engineer, said home buying wasn't much of an issue for him back in the mid-1990s.

"My wife and I bought our house in 1996. Our combined income was a little over $60,000 — I was fresh out of college. Yes, I became a homeowner in the first part of my 20s," he said.

With plans to have children, the Skars picked a four-bedroom house of roughly 3,100 square feet in the suburb of Sugar Land. They paid $109,500, less than two years of their household income.

In 1996, the median household income was $36,000 and the median house price was about $80,000 in the Houston area.

"We still live in the same house. We have raised our kids here, and we are back to a two-person household," Skar said. "We now work from home at least half of the week, and we are definitely not downsizing."

Skar said that his wife later quit her job to focus on raising their children. With salary increases based on seniority, he's able to provide for the whole family.

Skar is glad that his house value has appreciated more than three times in value since then.

"If it were today, we would have to pick a smaller house," he said. "My wife would have to work too — no way I could provide for the whole family alone with price increases outpacing salary increases by such a wide gap."

Today, the median home price in the Houston area is $345,000 — 4.5 times Houston's median household income of $76,735, and double the ratio of 1996 — according to the Houston Association of Realtors and local government data.

Skar said he feels lucky that they were financially comfortable without having to resort to double incomes.

"My wife staying home made life much less hectic for everyone involved. I don't think it's so easily doable in today's economy in my profession," Skar said.

Today many Americans need to make 70 percent more income on average than in 1995 to afford a typical home, according to numbers provided by Jessica Lautz, deputy chief economist and vice-president of research at NAR.

"The typical home buyer needs to earn nearly $110,000 to afford the typical priced home in the US with a 20 percent down payment. In comparison, in 1995, the typical home buyer only needed an inflation adjusted $66,000 to afford the typical priced home," Lautz told China Daily.

Government data suggests that roughly 60 percent of US households are making under $110,000 a year, making them unable to afford a home of their own.

Last year, Lautz wrote to compare the housing situation between 1995 and now. She pointed out that 42 percent of home buyers were first-time buyers in 1995. As of June, it's at 21 percent, the lowest ever since NAR started tracking such data in 1981.

"Home ownership is the top way Americans build wealth and financial security. For many young adults, while the dream of home ownership is still alive, the pathway to achieving it has been stalled," Lautz said.

The first-time home buyers are getting much older too. In 1995 their median age was 31 years old. This year, it's 40.

"Unfortunately, due to the rise in the age of first-time home buyers, which is now at a median age of 40, [young] homeowners have lost out on $150,000 in housing equity gains," Lautz said.

Lautz said low inventory is the reason for the affordability problem.

"Due to the undersupply of homes, there is upward pressure on home prices, which has put home ownership out of reach for many Americans," she said. "To improve housing affordability, it comes down to building more inventory that is varied at price points, with the focus on entry level or starter housing."

The most unaffordable areas are concentrated in California: eight out of the 10 most expensive areas are there. San Jose-Santa Clara ranked No 1 with a median home price of over $2 million, according to NAR. That's 10 times the area's median household income.

"Affordability is having people delay having children," said Ed Hirs, an economics lecturer at the University of Houston. "That's also going to add to, or compound, the problem of not enough young labor force down the road."

He said a much larger income is required today for people to start a family.

"It's a greater responsibility, so it's kind of hard to adjust to that. That's one of the reasons why I'm helping look after my granddaughter because my daughter and son-in-law can use the help," said Hirs, who is taking advantage of his summer break to fly across the country to his daughter's city.

For Hirs, the ever increasingly expensive healthcare is another great concern.

"The greatest problem facing the nation is the rising cost of healthcare, and especially that for the retirees," he told China Daily.

Retirees face healthcare challenges

In 1996, health insurance premiums for a family provided by private companies averaged $3,329. That number rose to approximately $27,000 in 2025, an increase of more than 700 percent.

In total, Americans paid $556 billion out-of-pocket for healthcare in 2025, a 200 percent increase over $182 billion in 1995. Overall, US healthcare accounted for 18 percent of GDP, the highest in the world.

Despite the high expenditure, the Congressional Budget Office estimated that about 36 million people —10 percent of the population — are uninsured in 2026.

Skar said he's missing the kind of health insurance he had in the 1990s.

"I remember I paid $5 for each clinic visit, and $2 for a generic prescription. My monthly insurance premium was only a fraction of what I am paying today," he said.

Besides paying hundreds of dollars a month for insurance premiums, Skar said he needs to meet the deductible of $1,500 before he sees any insurance payment.

"I am older and I see doctors more often. Last year, I paid the max-out-of-pocket $4,000. Adding insurance premiums for the family, it's almost $10,000 in medical related expenses."

But Skar dares not to forgo health insurance because he understands how a major illness can bankrupt a middle-class family.

In 1995, healthcare averaged 5.5 percent of after-tax income. In 2026, the cost is about 10 percent of household income.

Skar worries that healthcare expenses will only go up further as he gets older, a concern that's shared by Hirs, who said that the older segment of the population is facing the most challenges in healthcare.

"The cuts to the federal healthcare programs that the Congress and the administration are pushing through are going to fundamentally change the way healthcare is administered in this nation to the older members of the population," Hirs said. "The data show that in the last year of one's life, the greatest expenses are laid out mainly because of illness. I think what the US is facing is a rationing of healthcare for the older population."

Last year, the One Big Beautiful Bill disqualified millions of people from Medicare eligibility and Affordable Care Act subsidies. The bill also implemented $35 copays for each Medicaid visit.

At the end of July, the Trump administration ended Medicare Part D subsidies that will lead to a small premium increase for retirees. With the administration's push, Congress is contemplating other cost-saving changes to the Medicare and Medicaid programs.

Americans 65 years and older primarily rely on Medicare Plan B for medical insurance. The premium increase in the last three decades also far outpaced income: in 1995 the monthly premium was $46.10, now it's $202.90.

"It takes a larger and larger piece out of essentially a fixed retirement. The cost of healthcare has been increasing faster than the rate of inflation," Hirs said. "So with each passing year, the purchasing power of the Social Security and retirement package diminishes by the amount that healthcare increases."

Hirs said that the influx of immigrants helped to make the US "a vibrant growing society".

"Under the Trump administration, the restricted immigration has the potential of getting the US into a situation where the aging population is unable to take care of itself."

Education turns into a debt burden

Life is hard for adults and the old, but it's also hard for the young to strive for a better future, especially with rising tuition costs.

Skar came from a moderate background — his parents provided him with $2,000 when he graduated from high school in 1988. He opted for the local University of Houston.

"The tuition cost a couple of hundred dollars a semester. The total cost was close to $1,000 a year including fees," recalled Skar.

He worked part-time at the university library, and later the computer lab, to make ends meet. By the time he graduated, he had over $3,000 in student loan debt. He managed to pay it off in three years.

Today, the University of Houston tuition fee for in-state students costs $11,888, with another $1,430 for books and supplies.

"If it were today, I don't think I could make it out of college without a large amount of debt," Skar mused. "I would not be able to buy a home so soon after college."

Nationwide, the average in-state tuition fee for public colleges is $11,950, about twice the 1995 in-state tuition average of $2,848 to $5,940 in today's dollars.

The private college tuition fee has also increased at a similar or higher rate.

Rice University, which charges $71,140 tuition a year, announced in August that families making less than $200,000 a year will be able to attend the university free of tuition.

In the US, 84 to 88 percent of households make less than $200,000 a year.

Skar, while applauding Rice's generosity, said that the move signifies that private colleges are out of reach for approximately 90 percent of the population without financial assistance.

Congressional Budget Office data showed that in 1995, total student debt was $255 billion in 2026 dollars. Today, the student loan total is $1.86 trillion, an explosive increase of 7.3 times.

As the US celebrates its 250-year anniversary, a June Gallup poll showed that while 78 percent of respondents viewed the American dream as an important goal, only 46 percent said that everyone has the opportunity to achieve it.

Only 16 percent of respondents considered that the American dream has succeeded after 250 years, but more — 26 percent — said it has failed. A majority — 58 percent — believed that the American dream is not finished.

Bremmer, responding to a comment on The Ezra Klein Show, wrote: "I'm increasingly of the view that the United States doesn't have capitalism. It has a small class of extraordinarily wealthy people who are capitalists when they benefit from profits, but socialists when they are responsible for losses. This is closer to oligarchy as a system."