The “American Dream” was meant to capture the boundless opportunities present in the New World, and the ability of anyone—with sufficient zeal—to capture them. But to many, this now seems like the promise of another era, and an idea even America’s leaders believe needs to be mourned or revived, rather than celebrated or aspired to in our time.
President Donald Trump, in his inaugural address, vowed that the American dream “will soon be back”—a far cry from Jimmy Carter’s declaration nearly 50 years earlier that “the American Dream endures,” or Richard Nixon’s still-affirming claim in 1969 that the American Dream “does not come to those who fall asleep.”
A Fading Dream for Generation Z
For no group does the promise ring more hollow than the nation’s young adults. Polls show that members of the Gen Z age bracket, broadly defined as those born between 1997 and 2012, believe that the American Dream is at an all-time low.
A study by UCLA published in January found that 60 percent of Gen Z believe the American Dream is unattainable, though 86 percent consider it desirable. A more recent Ipsos survey echoed these results, with 61 percent viewing it as beyond their grasp.
The reasons given by respondents contain similar refrains: The precarity of the job market, the financial barriers to home ownership, wages that—when they do grow—fail to keep up with baseline inflation.
“Today’s young adults are being squeezed from every direction,” said Lindsay Owens, executive director of the think tank and advocacy group Groundwork Collaborative. “Rent and mortgages are increasingly out of reach, student loan payments swallow much of their paychecks, and corporate profiteering has pushed prices even higher on top of already punishing inflation. For Gen Z, these barriers are especially steep.”
As Owens told Newsweek, “education is at the center of the struggle.” While graduating from college was long considered a dependable path toward employment and prosperity, the premium placed on a degree has noticeably weakened in recent years.
College graduates now make up around one-third of the long-term unemployed, according to researchers at the University of Chicago, up from one-fifth a decade ago. Meanwhile, the Education Data Initiative found that 13.1 million Gen Zers—44 percent of those 18 or older—are saddled with student debt, further limiting any fiscal advantages a degree may confer.
Beyond the path to the job market becoming steeper, Owens noted that, for America’s young adults, “the milestones that once defined prosperity are slipping further away.”
Homeownership is emblematic of the financial security at the heart of the American Dream—viewed as offering stronger foundations to raise a family while building further wealth for Americans and their children. Yet today, Americans must earn around 70 percent more to purchase a median-priced home, per a recent Realtor.com analysis. Consequently, the National Association of Realtors finds that the number of first-time homebuyers in the U.S. has fallen to nearly a third of what it was two decades ago.
However, to economist Dean Baker, co-founder of the Center for Economic and Policy Research (CEPR), the homeownership element of the American Dream is a “mixed picture” for Generation Z.
“High interest rates have pushed homeownership rates among young people down a bit in the last three years,” he told Newsweek, “but they are still higher than at almost any point in the decade prior to the pandemic.”
He added that the majority of older households are now homeowners and, while this is not necessarily encouraging news, the surge in home valuations has increased their wealth and the ability to assist their children in buying homes of their own.
However, any increased ability—or need—to rely on parental support does little to support the idea that the American Dream is alive and kicking. And beyond homeownership, rising costs of everything from education to health care have bumped the lifetime price tag on the American to $5 million. Meanwhile, a survey by Gen Z-focused financial platform Step found that 41 percent run out of money almost every month, and only 22 percent consider themselves to be financially stable.
“For Gen Z, the American Dream isn’t just delayed—it’s being priced out,” Owens told Newsweek. “The question isn’t whether they’re working hard enough, but whether we’ll fix a system where rising costs of housing, education, and everyday essentials make it nearly impossible for their hard work to pay off.”
What the ‘American Dream’ Means to Gen Z
Financial barriers remain pressing concerns for America’s youth, but may also be prompting them to redraw the parameters of the modern American Dream.
“What I have found personally and professionally is that their Dream often looks different,” Kelli Smith, director of financial planning at Edelman Financial Engines,” told Newsweek. “More often than not, Gen Z does not value the big house with a white picket fence and kids and dogs running around the yard.”
“They value experiences and flexibility and they’re navigating a world that is very different from their older family members,” she added.
According to an Ipsos survey, more now see the American Dream as defined by “freedom” rather than any strictly financial metric.
“They say, ‘The American Dream is you find a job, you build a family, find happy work, save for retirement, and then you have kids and grandkids and enjoy the time throughout those moments,’” one participant told the pollster. “But I think currently that type of Dream might feel a bit unrealistic, because we’re at a generation where not everyone wants to own a house. Maybe it’s too expensive, maybe it’s personal choice. They don’t want to feel ‘stuck.’”
A poll by property management firm Entrata found that three out of four Gen Z renters see renting as preferable to buying, and not purely for financial reasons.
“What the survey told us about Gen Z is that renting is a great way of life for them,” Virginia Love, Entrata’s industry expert, told Newsweek. “While homeownership is something they want at some point in life, they are sort of rewriting their timeline. They don’t feel like they need to follow the whole ‘college, marriage, baby, house, bigger house’ timeline; they can create whatever life they want.”
The Dream May be Fading—for Everyone
This redefinition may be more in line with the vision held by businessman and historian James Truslow Adams when he originally coined the term in the 1930s—describing it as “not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable.”
But Gen Z’s more humble reimagining may be less a reflection of preference and more an acknowledgement of current financial realities, ones that are far from confined to those in their age group.
In a Harvard CAPS/Harris Poll conducted last month, 37 percent of those aged 18 to 24 said they would never be able to achieve what they define as the American Dream, though this share was below the 38-percent average across all brackets. And in a pre-election poll of voters, nearly equal numbers said their parents had attained the American Dream as they believed they themselves would be able to achieve it—49 percent to 52.
“Americans across the age spectrum are angry and frustrated over a false narrative of decline and loss,” economist Chris Thornberg told Newsweek. “We have invented an imaginary past where everyone 28 years old could buy a house on one income, there was no poverty and heath care was cheap and now rail as to why it isn’t like this anymore.”
The pressures facing Gen Z are more pronounced today, but their skepticism—or attempts to redraw the boundaries—of the American Dream may echo wider anxieties that have long dogged hopes of success and financial security across all ages.