"The American dream is shrinking," per BI

The American dream—much like a favorite pair of pants shrunk in the dryer—is steadily shrinking.

This iconic vision of American life, first solidified during the 1930s, promised a home with a white picket fence, 2.5 children, a stable career within commuting distance, and the occasional dream vacation. For decades, this ideal shaped cultural aspirations and political narratives. Yet today, that expansive dream feels increasingly out of reach.

Not only are fewer people managing to achieve it—much like a bag of chips or a roll of toilet paper offering less for the same price—but even those who attain it often find it unsatisfying. Americans are having fewer children, living in smaller homes, commuting farther to work, and taking fewer vacations.

The public is noticing. A Pew Research Center survey of 8,709 U.S. adults conducted in April found that 41% believe the American dream was attainable in the past but is no longer. Younger Americans are especially skeptical—18- to 29-year-olds were the most likely to say the American dream was never achievable, with only 39% maintaining hope in its possibility. Millennials shared this view, though slightly more optimistically.

Simultaneously, Americans are less satisfied with their personal lives, according to a January Gallup poll. The percentage of people who report being "very satisfied" has plummeted to near-record lows, comparable to the aftermath of the 2008 financial crisis. Even among high earners with college degrees, life satisfaction has declined, despite their relative success in achieving traditional markers of the dream.

This phenomenon could be described as the "shrinkflation" of the American dream.

Housing: The Cornerstone of the Dream

Homeownership, long considered the foundation of stability and security, is slipping further out of reach. Research shows homeowners experience less stress and gain equity over time, yet today’s homes rarely meet the expectations of the past.

In 2013, the median size of a new single-family home was about 2,460 square feet. By 2015, homes peaked at 2,470 square feet, only to shrink over the next several years. By 2023, the median square footage had fallen to about 2,180. The share of homes with two or fewer bedrooms hit its highest level since 2012, while four-bedroom homes dropped to their lowest.

Smaller homes might be beneficial for increasing housing supply, as advocates argue, but this trend coincides with another harsh reality: Americans are paying more for less. Median home prices have surged nearly $200,000 in recent years, with the cost per square foot climbing from $127 in 2016 to $224 by 2024. Americans now work an average of 110 hours a month just to afford their mortgages, leaving little of their income for other expenses.

With rising costs, it’s no surprise that first-time homebuyers are older than ever. The median age of first-time buyers reached a record-high 38 in 2024, compared to 29 in 1981 and 31 in 2014.

Renters Are Feeling the Squeeze Too

Renters face similar challenges. Zillow reports a median U.S. rent of $2,035, while Rent.com estimates $1,619 as of October—nearly $300 higher than in 2019. Meanwhile, apartments are shrinking. In 2016, the median size of new multi-unit apartments was 1,105 square feet. By 2023, that had fallen to 1,020 square feet, hitting a record low in 2021 during a surge in housing demand and prices.

The Decline of Family Life

A house becomes a home when filled with people, but fewer Americans are filling their homes with families. The share of homebuyers without children under 18 has reached 73%, a record high, as birth rates continue to decline. The average number of births per U.S. woman has dropped from nearly four in 1960 to just 1.7 in 2022.

Rising costs of housing and childcare, coupled with weakened social networks, have made raising children increasingly difficult. At the same time, cultural shifts like the rise of double-income, no-kid (DINK) households reflect changing priorities. While some Americans opt out of parenthood by choice, many still aspire to have children but find it financially unfeasible.

The Eroding Path to Fulfillment

Karen Benjamin Guzzo, a professor at the University of North Carolina at Chapel Hill, explains that having children is often viewed as the "final step" in achieving the American dream. Traditionally, the sequence includes completing college, securing a good job, getting married, buying a home, and finally starting a family. However, she points out, "Every step along the way has become less and less predictable."

What was once a beacon of opportunity has become an elusive goal, leaving many Americans to question whether the dream is still alive—or merely a nostalgic relic of the past.