The Patriot Post® · Can Congress Restore the American Dream?
The American Dream can be boiled down to the freedom and opportunities afforded to us in this great country. As we approach the 250th anniversary of the Declaration of Independence, from whence the American Dream sprang, how do things stand?
The principles date back to our founding, but the term “American Dream” was coined by historian James Truslow Adams in his 1931 book The Epic of America. He called it “a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”
The American Dream is not merely economic, but it is at least that. Given the centrality of homeownership, one particular sign is worrisome for the future realization of that dream.
I write a fair bit about inflation, and I routinely cite cumulative inflation since Joe Biden took office (28%) rather than the headline rate for any given month.
Today, let’s look at another measure: Using the U.S. Bureau of Labor Statistics measurement, $100 in 1990 has the same buying power as $263.05 today — 163% inflation. Ouch. When it comes to housing, it’s far worse. The median house price in 1990 was $90,000; today it’s $430,000. In other words, the median home now costs five times what it did a generation ago.
Meanwhile, median household income in 1990 was just under $30,000, making the average home about three times the average annual income. The most recent median household income estimate is from 2024, at a little under $84,000. That’s not far from triple what it was in 1990, but when the average home costs five times as much over that span, the math doesn’t work as well.
What’s worse is that comparing things to 1990 makes the picture look better than a more recent comparison.
Matt Walsh crunched some numbers, and he notes:
If you’re buying a home now, as opposed to 2019, then on average you’re paying 22% more in principal, 35% more in interest, 31% more in property tax, 72% more in insurance, 85% more in home maintenance, and 175% more in emergency repairs. Your total annual bill is 40% higher than it would’ve been just six years ago. If you’re the average American, your annual expenditure on housing went from $20,600 to $28,500.
Even if you stayed in the same home you bought years ago, locked into a 3% interest rate secured when rates were at record lows, you’re still paying more for your house than you were before.
Time for a blood pressure check.
The good news is that housing is all about location, location, location. It’s largely a local issue.
Naturally, then, Congress is getting involved and nationalizing things. By a vote of 85-5 on Monday, the Senate passed the 21st Century ROAD to Housing Act, which CBS News says “aims to increase housing supply and bring down costs, including by limiting institutional investors from purchasing certain single-family homes.”
The legislation now heads to the House, which previously passed a version of it, as the two chambers work to reconcile the bill. Democrats and Republicans alike seem pleased.
South Carolina Republican Senator Tim Scott says it represents “years of work to lower costs, expand housing supply, cut red tape, protect taxpayers, and help more Americans achieve the dream of homeownership.”
Massachusetts Democrat Senator Elizabeth Warren is also a fan. “There is so much in this bill,” she said. “Each piece, directing us toward increasing the supply of housing, bringing down the cost, and making housing something that is not just a Wall Street investment, but is actually there for American families.”
Senate Majority Leader John Thune called it “a significant bill to make life more affordable for hardworking Americans,” while Senate Minority Leader Chuck Schumer touted it as “a reasonable, bipartisan solution to help the American people.”
President Donald Trump also supports the bill, primarily for its ban on institutional investors buying homes, though, with his typical hyperbole, he dubbed it “the most comprehensive and consequential housing legislation in the history of our country.”
However, Trump has also put it poorly. “I don’t want those values to come down,” Trump said of home prices in January. “We’re going to drive those values up, but we’re also going to try making it easier for people to buy.” That likely means redistribution of income.
While the legislation does some good work to clear hurdles — such as streamlining environmental reviews with pre-approved designs and zoning reforms — it also creates what could easily become a slush fund. Cities that boost housing supply will receive $200 million a year for five years from the Innovation Fund. Still, Scott says the bill is deficit-neutral.
Washington (especially Democrats) seeded the 2008 financial crisis that was largely driven by their housing policies. Color me skeptical that Washington will fix it this time. As Walsh argues, there are really five systemic problems in the housing market, and the ROAD to Housing Act addresses one of them — building regulations. Two of the other issues, crime and immigration, are heading in the right direction … for now. Others remain unaddressed.
The American Dream could use a boost, and this bill likely only tinkers around the edges.