The average age of a first-time home buyer reached 40 in 2025, a stark figure that underscores the shifting landscape of American homeownership. This statistic, among others, fuels a growing debate over whether the long-held ideal of owning a home still represents the quintessential American dream. Ryan Serhant, the founder and CEO of real estate referral network Serhant, recently articulated a provocative view, suggesting that the notion of homeownership as the American Dream was merely “a slogan created by banks to create interest income on home loans,” drawing a parallel to student debt. This perspective, however, largely overlooks the historical context of how homeownership became intertwined with national identity, a narrative deeply rooted in the economic upheaval of the Great Depression and the federal government’s subsequent interventions.
While Serhant, a prominent figure in luxury real estate who launched his “Brokerage 3.0” in 2020 and achieved a billion dollars in sales within 35 days in early 2025, brings a contemporary real estate lens to the discussion, the historical record paints a different origin story. The concept of the “American Dream” gained widespread recognition through James Truslow Adams’ 1931 work, *Epic of America*, defining it as “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” This definition emerged during the profound economic crisis of the 1930s, a period that saw a widespread foreclosure crisis and a re-evaluation of capitalism itself.
Mortgages existed in America long before this era, though they were vastly different. In the 18th and 19th centuries, mortgage terms were typically short, ranging from five to ten years, and banks often financed only about 50% of a home’s value, demanding substantial down payments. The Great Depression exposed the fragility of this system, prompting President Franklin Delano Roosevelt’s New Deal solutions. The Home Owners’ Loan Corporation, established in 1933, refinanced distressed loans with more favorable terms. This was followed by the Federal Housing Administration (FHA) in 1934, which began insuring private mortgages, significantly reducing down payments to 10% and introducing the 20-year and 30-year amortizing loans that are common today. These federal initiatives were designed to stabilize the housing market, prevent defaults, and make homeownership more accessible, aligning with Adams’ vision of a “better and richer and fuller” life for all.
The post-World War II era further cemented homeownership as a cornerstone of the American Dream. The 1944 GI Bill allowed veterans to purchase homes with zero down payment, contributing to an 18-percentage point increase in ownership rates. This period also saw suburban expansion and the increased liquidity provided by entities like Fannie Mae, founded in 1938, and later Freddie Mac in the 1970s. These developments fostered an environment where owning a home became not just a shelter, but a primary vehicle for wealth creation, fueling both the baby boom and what *Fortune* founder Henry Luce termed “the American century.”
However, the momentum of ever-increasing homeownership rates faced a significant challenge with the 2008 financial crisis. The housing market peak of 69% homeownership in 2004, a figure even President George W. Bush championed as central to an “ownership society,” has not been regained since. The crisis resulted in millions of foreclosures and a halt in construction, contributing to a current shortage of approximately two million homes. This confluence of factors, including high mortgage rates, a tight inventory, and escalating home prices, which have surged over 40% since the pandemic began, has undeniably made homeownership more difficult to attain, particularly for younger generations. Jessica Lautz, deputy chief economist at the National Association of Realtors, noted that the share of first-time buyers has contracted by 50% since 2007, highlighting the real-world consequences of an affordable housing shortage.
Today, while homeownership rates hover around 65%, first-time buyers represent only 21% of the market. The financial strain is palpable, with housing costs often exceeding one-third of household income. This reality has led some, like best-selling author JL Collins, to question the immediate financial wisdom of homeownership for those seeking early financial independence, citing the “ballooning hidden costs” beyond the mortgage payment itself. While Serhant’s assertion about banks creating the slogan may not align with historical facts, his observation about the current difficulty of achieving homeownership resonates deeply with many Americans grappling with a challenging housing market. The dream, once broadly accessible through federal policy, now feels increasingly distant for a significant segment of the population.
