The Great Postponement: Why the American Dream Is Slipping Away

Economic pressures and rising housing costs are driving a shift in U.S. social milestones known as the Great Postponement, according to Susan Wachter, a professor of real estate and finance at the Wharton School of the University of Pennsylvania. This phenomenon sees young adults delaying homeownership, marriage, and parenthood as affordability declines, creating a K-shaped economy where progress often depends on parental wealth rather than individual effort.

Housing Affordability and Mortgage Trends

Housing costs for new buyers have more than doubled since 2022, according to Prof. Wachter. This shift is driven by a combination of rising property prices, which increased by 40%, and a spike in mortgage rates. Freddie Mac data shows 30-year mortgage rates were 3.45% a decade ago, compared to 6.58% in 2026.

The National Association of Realtors tracks these trends through a housing affordability index. A reading of 100 indicates a family with median income can qualify for a mortgage on a median-priced home. In 2023, the index sat just below 97. By May 2026, the index rose to 105.1, signaling that most families can no longer afford to buy a home.

“For many young adults, buying a first home is no longer the first step toward financial security but the reward after years of saving, career advancement, and often family assistance,”

Susan Wachter

Delayed Life Milestones and Co-Residency

The financial barrier to entry is reflected in living arrangements and family planning. A June study by Realtor.com found that 25.2 million adults under 35 lived with their parents in 2025, representing nearly one in three adults in that age group. The study noted that 70% of these adults were employed, suggesting that co-residency is increasing among those with steady jobs rather than those unemployed.

Other key life markers have moved back over several decades. Census Bureau data from December shows the estimated median age at first marriage rose to 30.8 for men and 28.4 for women, up from 23.5 and 21.1 in 1975. Additionally, a 2025 report from the National Library of Medicine found the mean age of mothers at first birth increased from 26.6 in 2016 to 27.5 in 2023.

Prof. Wachter notes that while economics play a primary role, expanded career and educational opportunities for women have also contributed to the decision to delay childbearing and marriage.

The K-Shaped Economy and Policy Response

The disparity in access to family resources is creating a divide in how young adults achieve financial stability. Prof. Wachter describes this as a K-shaped economy, where those with access to parental wealth can still move toward homeownership while peers without such resources face steeper obstacles.

“The result is an increasingly ‘K-shaped’ economy, where young adults with access to parental wealth continue progressing toward homeownership, while equally capable peers without those resources face much steeper obstacles,”

Susan Wachter

To address these gaps, the U.S. government passed the 21st Century Road to Housing Act this year. The legislation includes proposals to expand the supply of affordable housing and increase access for those without family financial assistance.

Prof. Wachter questions whether these policy evolutions can move fast enough to ensure that the American Dream remains tied to hard work and opportunity rather than the circumstances of a person’s birth.