Home sales are down, prices are up, and new construction has slowed. Some have even speculated that the American dream of homeownership has become unattainable. However, despite media headlines portraying a broad swath of negative activity across the U.S. housing market, there is reason for optimism, with clear signs of a comeback.
The current moment
To understand why some are questioning whether homeownership is a reality for many Americans, we need to consider some factors that have led to the present moment. First is the fact that the U.S. real estate market is in the midst of a historic low in new home sales, while new housing starts fell to a five-year low in May, and home prices remain elevated.
In new construction, several external economic factors are at play that are coalescing to have an impact on the housing market, such as tariffs and broader economic uncertainty, which continue to place upward pressure on homebuilding costs, particularly for materials like lumber, steel, HVAC and electrical components.
These are not just abstract policy moves; they have direct, downstream effects. When input costs rise, developers either delay projects, shrink home sizes and/or pass costs directly to buyers in the form of higher list prices.
Dynamic times
We saw this dynamic during the post-pandemic inflation period, but back then, rapid home price appreciation helped offset rising costs. Today, it is a different story. Affordability remains a significant hurdle, leaving developers with fewer options and buyers with less flexibility.
Add in continued volatility from inflation, interest rates and global trade, along with builders holding back thanks to economic uncertainty around labor availability and buyer appetite, it’s clear we are in a more constrained and cautious building environment.
While it’s understandable that some have taken the current market conditions as a sign that the dream of homeownership is simply that — a dream — these reports are misleading, as we find ourselves at a time when there are pockets of opportunities for both buyers and sellers in many hyperlocal environments.
The reality is that most Americans have not given up on the American dream of homeownership. In fact, there is an increased belief that things will get better among millennials and Gen Zers, the generations considered most impacted by the current housing crisis.
Looking at the numbers
According to internal market research commissioned by Engel & Völkers, 77 percent of Americans consider home ownership part of the American dream, 17 percent believe the dream of owning a home is more attainable than it was in the past, and 22 percent believe it is as achievable as it has ever been.
While these findings align with current market conditions, there is a notable generational divide: Only 13 percent of baby boomers and 11 percent of Gen Xers said homeownership is more attainable. In contrast, 23 percent of millennials and 24 percent of Gen Zers said it is more attainable.
When comparing older and younger generations, 35 percent of boomers and Gen Xers said homeownership is as or more feasible, while 44 percent of millennials and Gen Zers believe the same. This indicates a growing confidence among younger generations in achieving the dream of homeownership.
While the path to homeownership has undeniably become steeper, the dream itself remains very much alive — though transformed. Homeownership continues to represent one of the few hybrid investments that blends financial growth with personal well-being.
It’s a lifestyle investment and a tangible asset that appreciates over time while offering something priceless: a sense of place. A home is where people recharge, raise families and build memories. That dual role — as both a lifestyle anchor and a financial vehicle — gives homeownership a resilience that transcends economic cycles.
The American dream has evolved
Today’s economy has stretched the timeline and altered the trajectory for many aspiring homeowners. In most U.S. markets, rising home prices, limited inventory and higher interest rates have made buying a home more difficult. But “difficult” is not the same as “impossible.” With greater intentionality — saving more aggressively, adjusting expectations and planning over longer time horizons — homeownership is still within reach for many.
What is perhaps most notable is the way the American dream itself is evolving. The traditional ideal — a detached, 2,500-square-foot home with a yard and a white picket fence — is no longer the singular vision.
We are seeing an increasing demand for alternative housing types, including micro-units, accessory dwelling units (ADUs), multigenerational homes and even co-living arrangements, which are all being supported by progressive changes in many local zoning codes. These shifts reflect a broader cultural evolution in how people define success, family and quality of life.
The real challenge is not a lack of desire for homeownership — it is that the current housing supply has not kept pace with the diversity of lifestyles, family structures and economic realities shaping the modern American dream. As a result, many would-be homeowners are left searching for options that do not exist in the places they want to live.
Additionally, many people are competing for the same type of home. The first-time homebuyer may be looking for the same type of home as the downsizing boomer. The boomer, who likely has equity buildup in their current home, can and will continue to outbid that first-time homebuyer, who has relatively less equity.
A turning point
We are entering a new chapter in the housing market — one that tilts more favorably toward buyers compared to what we have seen in recent years. While affordability remains a headwind, buyers now have more choices, more negotiating power and less urgency to overbid. It is not a full buyers’ market yet, but the tide is turning. For informed, long-term buyers, the landscape is steadily improving.
This summer especially marks a quiet turning point in the housing market. Inventory is loosening, and in many markets, buyers have more leverage than they have had in years past. Mortgage rates remain elevated, but if you have the financial stability and a long-term outlook, this is a strategic window to buy, but not for quick gains, for quality of life and long-term value.
The future of the American dream
In short, the quintessentially American dream of owning a home is not dead — it is changing and adapting to both the market and evolving consumer preferences. For the dream to remain attainable, housing policies, development strategies and lending practices must also adapt.
Stuart Siegel is the President and CEO of Engel & Völkers Americas in New York. Connect with him on Instagram or LinkedIn.
