The most alarming economic trend in the United States today may not be the ballooning federal deficit, skyrocketing consumer debt, or even the escalating cost-of-living crisis. Rather, it may be the fact that owning a home – the cornerstone of the American Dream – is now increasingly out of reach for millions.
A new report from Zillow highlights just how dire this crisis is. As of March 2025, there were 233 cities nationwide where a typical “starter home” – defined as being among those in the lowest third of home values in a given region – cost more than $1 million. Five years ago, there were just 85 cities where that was the case.
In other words, the “million-dollar starter home” is no longer just a California and New York phenomenon. In 11 cities in Florida and 7 cities in Texas, the two conservative-led states that have seen the most growth in recent years, the average starter home now tops seven figures.
Overall, home prices have increased by about 26 percent over the past five years. Over that same time period, real wages have increased by about 1.6 percent.
While the COVID-19 pandemic accelerated this trend, rising housing unaffordability has been going on for decades. In 1985, the median household income in the United States was about $22,400, while the median home price was $78,200 – a price-to-income ratio of 3.5. By 2022, the median household income had risen to $74,600. But the median sales price of a single-family home had exploded to $433,100, for a price-to-income ratio of 5.8.
To be sure, there are still cheap starter homes to be found. The nationwide average for a starter home is still a relatively attainable $192,514 according to the Zillow report. But most of those cheaper homes are in areas with relatively few job opportunities. Many are in unsafe neighborhoods or are in need of serious repairs that add on to the sticker price of a home.
As a result, the median age of renters is also increasing – up to 42 years old as of last year. Many Americans are giving up on the dream of homeownership entirely, creating a whole new set of problems as rent prices are rising even faster than home values and mortgages.
There is nothing inherently wrong with renting. Renters don’t have to worry about some of the headaches of homeownership such as repairs, broken appliances, maintenance, and property taxes. Renting also provides a cushion, particularly for young people just getting started in their careers, to save up money for a down payment.
But when renting becomes the only option for the average family, it constitutes a serious crisis – not just for the American economy, but for American culture as well.
Going all the way back to before the founding of this country, owning property has been a pillar of the American Dream. There is a reason that five of the first ten amendments to our Constitution have to do with establishing and protecting property rights.
The promise of the New World was primarily the promise of owning property. The United States was the first nation in history where the average person could realistically purchase and own property through their own hard work, without needing aristocratic lineage, royal favor, or inherited wealth. That is the root of American exceptionalism, and is something too often taken for granted today.
Property ownership promotes the other virtues which make America unique and which elevated a backwater British colony to become the greatest superpower the world has ever seen – hard work, personal responsibility, and self-reliance. Those virtues are in short supply today, and it is no coincidence that they have declined along with the dream of homeownership.
On a practical level, the rising cost of homes is also causing many young people to put off starting families, contributing to the catastrophic fertility crisis afflicting the United States. Homeownership provides a sense of security that promotes family life, the bedrock of any healthy, thriving society.
Fortunately, President Trump recognizes the serious threat that housing unaffordability poses to the American Dream. On his very first day in office, Trump signed an executive order targeting Biden-era regulations that have artificially inflated building costs. The Trump administration has also moved to open up more federal lands in the American West for development, restoring the historical promise of that region as a land of opportunity.
But more can and should be done to bring the dream of owning a home back within reach for the average American.
For starters, Trump and congressional Republicans should go after the Wall Street corporations buying up entire neighborhoods and forcing everyday Americans out of the market.
In 2022, investment banks bought one of every four homes sold. These companies pay cash, often above asking price, outbidding normal buyers and driving up costs. They then turn these homes into rentals, further constraining supply. Since the Great Recession of 2008, Wall Street firms have purchased hundreds of thousands of single-family homes.
In some states like Ohio and Nebraska, lawmakers have proposed legislation “to tax large landlords so heavily that they would likely feel compelled to sell their properties.” But Congress is the only entity with the antitrust powers to end big banks’ underhanded practices nationwide.
If we want to preserve the American Dream for future generations, we must restore the ability of ordinary citizens – not just corporations and the ultra-wealthy – to own a piece of this country. Without property ownership, the promise of America begins to fade.
Shane Harris is the Editor-in-Chief of AMAC Newsline. You can follow him on X @shaneharris513.
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