Most Americans grew up with the understanding that if they worked hard, they could own their own home.
But thanks to Biden’s inflation and massive student loan debts, this idea is just a dream for many.
And now this Realtor just explained the numbers, showing how the “old American dream” is being pushed out of reach.
Americans can’t afford to buy a home
Freddie Smith is an Orlando Realtor and TikTok creator who says that the American middle class is in serious trouble, and high home prices could lead to their inability to achieve the American dream.
American households now need to make around $120K a year to purchase a typical single-family home in most markets.
Smith spoke to Fox News Digital about the American dream crisis, saying that “most of us in America would define the middle class as somebody who can work a 40-hour-a-week career and have the income to purchase the average home in America.”
He mentioned how most people grew up middle class, but “nowadays, what has moved the goalpost more than anything is the housing market.”
Smith explained that just a few years ago, making between $60 and $70K per year would have been enough to qualify for a home.
In 2024, the average cost of a house is around $400-$420K, so salaries now need to be closer to $120K a year for that to be achievable.
He emphasized how the high prices have now forced many people to rent for longer.
Smith said, “Rent prices are taking up 30-40% of peoples’ income, making it harder for them to save for a house. So, it’s this perpetual cycle that is keeping people out of the middle class.”
He also explained that this problem has continued to worsen at a rapid pace in recent years.
Even if someone makes a $120K per year salary without children, it’s much harder to buy a home with the increase in debt that most Americans are facing.
“Most people are carrying student loan debt, which is at an all-time high, and the average payment in the country is $500 a month for your college degree. [There are] some people I’m seeing in my comment section saying ‘$500, I wish, it was $1,200 a month for me,’” he continued.
Aside from student loans, credit card debt is also at record high levels, and while reckless spending could play a role, Smith says many people say they have no choice but to use their cards to buy everyday essentials like groceries.
In 2023, the average income in America was approximately $69K a year, and just 18.8% of Americans made $100K or more.
The top 10% of individual earners made $135,605 a year in 2023.
The cost of living is soaring
It’s not just housing that’s causing Americans to feel the pinch.
According to Smith, “People are spending about $1,200 to $1,500 a month on daycare, and I’ve heard it is as much as $3,000 to $4,000. So when you add in somebody who’s renting for $2,500, $2,000 for daycare, $1,000 for two college loans, just that alone, you need $100,000 as an income just for that.”
Due to the rising costs, many young people are opting to stay at home with their parents to help them save money.
Smith said he’s seen communal living go much further for longer in places like his state of Florida.
“The millennials, they’re the pinched generation where college essentially stopped working for most. The debt piled up, and the old American dream died, and we got left holding the bag,” said Smith.
Informed American will keep you up-to-date on any developments to this ongoing story.