We’ve all heard broad statements on the American Dream in political stump speeches, but for millions of people, the dream is more than a cliché–it’s a concrete life goal.
We at Hearth wanted to find out what the dream means for regular Americans.
For our 2017 State of the American Dream report, we surveyed 2,000 people across the country. Some of our findings may confirm what you already think; others will definitely surprise you.
People don’t feel they're achieving the American Dream: Fewer than 1 in 5 Americans think they’re living the full American Dream.
Homeownership is still key: Despite stories proclaiming the rise of the renters, all generations–including millennials–agree homeownership is very important to achieving the American Dream.
Renovations are critical to the American Dream home: Of American Dream-aspiring homeowners who see their home as a big part of achieving the dream, 79% think renovations are essential.
What is the American Dream? Is it in danger?
“Owning a home I love” ranked higher than any other options when we asked respondents to select the three most important elements of the American Dream.
Choices ranged from “sending my child to college” to “finding a fulfilling career” to “affording rent and other expenses without hardship”.
Here are some highlights:
37% more people identified “owning a home I love” than “starting a family” as an important part of the American Dream.
41% more people selected “owning a home I love” than “finding a fulfilling career”.
We’ll explore homeownership in more detail later in this report.
Almost 50% of the country thinks it’s not achieving any of the American Dream
Less than 20% of people think they’re living the full American dream, and only 36% think they’re achieving part of the American Dream. That means that about half of the country isn’t achieving the American Dream at all. This sobering truth doesn’t change across generations.
Nevertheless, there are some notable generational differences:
Baby Boomers are 16% more likely than millennials to think they’re living some of the American Dream. This statistic makes sense; baby boomers have had more time to build wealth, invest in their homes, and find fulfilling careers. Many millennials are still struggling to launch their careers and find a home.
Among the respondents who don’t think they’re achieving any of the American Dream, millennials are 49% more likely than Baby Boomers to think the dream is within reach. Perhaps baby boomers who have not yet achieved the American Dream feel they’re unlikely to do so.
When asked what’s putting the American Dream at risk, 1 in 5 Americans cited consumer debt. About 10% cited a lack of financial literacy, while less than 10% cited stagnant wage growth.
70% of the country thinks achieving the dream is important
This statistic, more than any other in this report, inspires our team at Hearth. Even as Americans find themselves bitterly divided, we’re all striving for a better future.
Homeownership is at the heart of the American Dream
Today, many stories claim that homeownership’s importance to the American Dream is declining. We found something different: the homeownership dream remains strong.
Homeownership is still very important to the achieving the American Dream
Of the 70% of Americans who think achieving the American Dream is important, 70% think homeownership is at least important to the dream–with 41% calling homeownership very important. Somewhat surprisingly, these numbers don’t change much when broken down by whether someone owns a home.
The importance of homeownership also doesn’t change across generations.
Contrary to popular opinion, millennials who want to achieve the American Dream are 5% more likely than Baby Boomers to think homeownership is important. And two-thirds of millennial renters view homeownership as important to the American Dream.
Although millennials are often portrayed as fickle and transient, they actually seek the stability of homeownership even more than their parents.
Why does homeownership matter to the American Dream?
Let’s first consider financial motivations.
Buying a home is the biggest investment most Americans will ever make. However, of people who think achieving the American Dream is important, only 4% cite the opportunity to build wealth as their primary motivator.
It turns out that people who want to achieve the American Dream associate homeownership with creating a living space for family (26%), followed closely by a feeling that their house is an achievement that reflects hard work (25%).
We took a hard look at the population who said the American Dream was important to them and also said that owning a home is critical to the American Dream. This population reveals what aspects of the homeownership experience define the American Dream.
We’ll call this segment American Dream homeowners.
On this point, the survey showed a big divergence between those who already own homes and those who do not:
Homeowners are 126% more likely than non-homeowners to view homeownership as a way to build wealth. Nevertheless, homeowners still overwhelmingly associated homeownership with a family living space.
Homeowners are 23% less likely than non-homeowners to see homeownership as a tool to create a living space for family.
Homeowners are 24% more likely than non-homeworners to see homeownership as an achievement that reflects hard work.
American Dream homeowners also had significant variation across generations:
Millennials are 77% more likely than Baby Boomers to see a home primarily as a way to build wealth. However, creating a living space for family was vastly more important than building wealth for both generations.
Not surprisingly, Baby Boomers are 98% more likely than millennials to see a home as a way to pass wealth down to children or family. Millennials are less forward-looking about using their home as a means of wealth transfer.
Millennials are 29% more likely than Baby Boomers to see a home as an achievement that reflects hard work–an outcome we expected given that many millennials are still working hard to afford their first homes.
The American Dream home has been renovated
The American Dream home isn’t realized on move-in day.
Rather, 64% of American Dream homeowners thinks it’s very important to “own not just any home, but a home you love.” An additional 27% called it “fairly important”. For over 90%, homeownership alone is not enough; it has to be the right home.
Housing supply limitations mean that, instead of finding new homes, many people turn their houses into American Dream homes through renovations. That’s why Americans spend hours watching HGTV and invest $300 billion into home improvement every year.
The survey results make this clear: Among American Dream homeowners, 79% think renovations are important, with 45% calling them very important.
American Dream homeowners viewed renovations as critical -- regardless of their primarily motivation for homeownership. For instance, among the people who viewed their home as a way to build wealth, 76% thought renovations were important.
Nearly identical percentages viewed renovations as important among those who saw their home as a source of comfort (77%) or those who saw the home as a living space for family (78%).
Similarly, all generations of American Dream homeowners agree that renovations are critical: Baby Boomers (84%); Generation Xers (83%); and millennials (75%). And the same is true across genders: females (78%) and males (80%).
Even among those who have yet secured a home, 81% view renovations as a core comportant of the American Dream.
This survey revealed a powerful finding: Across demographic groups, homeownership remains a precondition of the American Dream, but until a home is renovated into the right home, the American Dream may remain unrealized.
It’s clear that all generations have the same desire as Americans have always had: the ability to own not just any house, but a home that makes us proud, that ensures our financial future, and that provides a space to raise a family. Getting in the front door to a home you own is just the first step.
To learn more about Hearth and our 2017 State of the American Dream report, contact us at email@example.com.