The American Dream Will Now Cost You $5 Million

Living the American dream—owning a home, raising kids, retiring comfortably, and maybe throwing in a vacation or two—has never been cheap, but a new report from Investopedia presents a striking statistic: Over a lifetime, checking all the traditional boxes now incurs a $5 million price tag.

That figure reflects not only rising prices but also the way key costs, such as housing, health care, and education, have far outpaced wage growth over the past two decades.

It highlights a growing disconnect: While most Americans still aspire to the same milestones previous generations did, the financial reality of reaching them has never felt further out of reach.

To get to that eye-popping total, Investopedia added up the estimated lifetime costs of eight milestones Americans most often associate with the dream: retirement, health care, homeownership, raising two children and sending them to college, weddings, cars, annual vacations, and pets.

The analysis drew on data from the U.S. Bureau of Labor Statistics, the Economic Policy Institute, and industry groups, with all numbers adjusted to 2025 dollars. While not everyone’s version of the American dream looks the same, Investopedia’s survey showed that most people consider these eight categories essential.

Put together, the costs outpace what most households can realistically expect to earn. The average American with a bachelor’s degree will make about $2.2 million less over a lifetime than it takes to hit the $5 million threshold. As Investopedia noted, achieving the traditional dream now requires, at a minimum, a dual-income, college-educated household.

"Median household income was around $84,000 in 2024, meaning it would take about 60 working years at this level to reach $5 million," says Jake Krimmel, senior economist at Realtor.com®. "Housing, health care, and education costs have all increased in recent decades, which makes it harder for families to save for these very expenses."

Housing is the biggest slice of the dream

Of the eight categories, homeownership remains one of the most defining—and costliest—pieces of the American dream. Investopedia pegged the lifetime cost of owning a home at $957,594, up from $929,955 just a year ago. With median home prices hovering around $415,000 in 2025 and mortgage interest rates at 6.26%, buyers ultimately end up paying nearly double the sticker price over a 30-year loan term.

Affordability pressures are showing up in today’s housing market. According to the Realtor.com August 2025 housing report, national median list prices held flat at $429,990 compared with last year, but that’s still 36% higher than in 2019—and that’s before factoring in elevated borrowing costs. The price per square foot, a more telling measure of underlying home values, has surged more than 50% in the past six years.

Active listings rose 20.9% year over year in August, marking the 22nd straight month of gains. Meanwhile, new listings have declined for four months in a row and pending sales remain weak. Sellers are also showing fatigue: More than 20% of listings saw price cuts, and delistings jumped 57% year over year as frustrated homeowners pulled back.

"If owning a home is a key pillar of the American dream, the best thing our local, state, and federal lawmakers can do is to make it easier to build new housing," says Krimmel. "And the best thing we can do for our fellow citizens who want to achieve their own American dream is to allow the market to build new housing, rather than protesting or blocking new development."

On the ground, some local markets are telling a different story.

In Detroit, for example, real estate agent Erica Collica says move-in-ready homes in desirable neighborhoods are moving faster than they have in years.

“Buyers are coming in confident and decisive,” she tells Realtor.com. “There’s a renewed appetite for city living, fueled by Detroit’s growth in culture, small businesses, and development projects.”

Suburbs such as Royal Oak and Ferndale are also seeing strong demand from families and young professionals drawn to walkable neighborhoods at a fraction of the cost of other major metros.

The upshot is a market moving toward balance. Nationally, supply now sits at five months—often considered equilibrium between buyers and sellers—but conditions vary sharply by region. Seven large metros are firmly in buyer's market territory, while 20 remain seller-friendly.

In Detroit, Collica believes momentum is here to stay, noting that many buyers see the city as a long-term play: “Buy now, ride the appreciation, and lock in a piece of the city’s comeback.”

For would-be buyers chasing the American dream, patience and location are everything.

Americans are also struggling with other big costs

Housing may dominate headlines, but it’s far from the only big-ticket item in the dream. According to Investopedia:

• Retirement savings require an estimated $1.64 million to cover 20 years of expenses in today’s dollars.
• Health care is a growing burden, with lifetime costs topping $414,000, due to annual increases of 5% to 6% over the past two decades.
• Raising two children and paying for college now exceeds $876,000, up more than $40,000 from 2024.
• New cars add $900,000 over a lifetime, reflecting higher loan, insurance, and maintenance costs.
• Even “smaller” milestones like pets ($39,000) and weddings ($38,000) contribute to the total.

Taken together, these figures underscore how the financial weight of the American dream has shifted. Where once homeownership alone might have defined middle-class security, today it’s just one expensive piece of a broader puzzle.

"The American dream works in virtuous and vicious cycles. The next milestone is easier to achieve when you already have a few under your belt," says Krimmel. "When you already own a home, your living expenses are stable and predictable, so it's easier to save for retirement, your kids' college fund, or that new car. On the other hand, younger Americans who have yet to get started will find it increasingly harder to get on their American dream ladder."