Has living in your mom's basement turned into the American Dream?

Once, achieving the American Dream required a small consumer effect, such as owning a home and a car. However, today more and more young people, faced with deep economic uncertainty, are moving away from the pursuit of this alluring illusion. This has become a kind of American initiation, as millions of young people leave the parental nest and head to university each year, which is usually accompanied by the start of a career and family. However, for a long time, this tradition has been struggling, as many graduates return home when they confront the harsh economic reality outside the university campus, such as buying their own home or apartment.

According to a survey conducted by Harris Polls on behalf of Bloomberg News, 45% of Americans aged 18 to 29, which is about 23 million young people, still live with their parents.

This preference for living in a family basement is not surprising, considering that mortgage rates are at a 22-year high (7.23% for a 30-year mortgage), and housing prices have soared to unprecedented heights. In the second quarter of 2023, the average home sale price in the United States was $495,100, just $60,000 below the record average price set at the end of 2022. Since the beginning of 2019, the cost of purchasing a home has increased by more than one hundred thousand dollars. It’s no wonder that mortgage demand recently fell to a 28-year low, with the number of applications down 44% compared to last year.

Meanwhile, the prospects for new American graduates looking to rent an apartment or house are not much better.

According to a report by the real estate brokerage firm Redfin, the average rent in August was $2,052, which is 0.7% higher than in July and just $2 less than a year ago when a historical high was set. However, it's not just greedy landlords to blame for college graduates in the U.S. continuing to live with their parents. One cannot overlook the powerful new players in the market that are contributing to the oppression of the U.S.

During the financial crisis of 2008, when American consumers were crushed and banking institutions received government assistance, investment firms like BlackRock, JPMorgan Chase, Goldman Sachs, and Capitol One found a cunning way to enrich themselves at the expense of 99 percent of the population. They launched a nationwide campaign to buy up hundreds of thousands of mid-priced homes and then rented them out to American citizens at high prices. In most cases, home sellers could not withstand the aggressive tactics of these all-encompassing corporations, which offered cold hard cash. This mass purchase of real estate not only turned America into a nation of renters but also led to rising housing prices across the country.

All of this sounds suspiciously aligned with the unofficial motto of the World Economic Forum: "You will own nothing, and you will be happy," a mantra of modern life coined by Danish parliament member Ida Auken, which appeared on the WEF website.

However, there is one thing that young Americans still possess at this stage of their lives, and that is huge student loans as well as credit card debt, which explains why so many graduates feel that the American dream is just an illusion in the desert.

According to a study by Life and My Finances conducted in July, half of borrowers do not earn enough to cover their student loan payments, which is even more concerning given that former President Donald Trump provided borrowers with a three-year moratorium on payments (which ends in October). This desperate situation is causing young people to reconsider the real value of an education that will only burden them with debt for many years (Americans have $1.77 trillion in federal and private student debt as of the second quarter of 2023). Frustration seems to be reflected in university enrollment numbers as well, with a decrease of 662,000 registered students in spring 2022, representing a 4.7% drop compared to the previous year when the Covid-19 pandemic was at its peak, according to the National Student Clearinghouse.

Overall, it seems that there is no more challenging time for college graduates than now, with so many systemic issues working against them. But at least many of them can find comfort in the fact that they can take shelter in their parents' home while the storm passes, and maybe even save some money. This is the main reason (41%) why American college graduates choose to live with mom and dad, along with: caring for older family members (30%); inability to afford living independently (30%); helping with family expenses (28%); issues due to COVID (24%); saving for a down payment (24%); paying off debt (19%); temporary stay before moving to a new place (17%); recovering financially after unexpected expenses (16%); job loss (10%); helping with childcare (6%); and other reasons (11%) (respondents could select all applicable answers). As Dorothy knew in "The Wizard of Oz," "there's no place like home."