Lunacy

I guess we file this one under “Lunacy.”

Zillow, the housing app, has a report out titled: In 233 U.S. Cities, Even a Starter Home Costs $1 Million

Seven figures for a  starter home!

I remember absolutely freaking out in 1993 when I and my former wife signed a contract to buy our first home—a starter home built by Centex in the northern Dallas neighborhood of Flower Mound. The price: $112,000.

Amy, my wife at that point in life, had to talk me off the ledge.

As I recall, I was earning at the time about $44,000 annually as a newly hired writer for The Wall Street Journal. Amy, a registered nurse who was then working for a managed-care company, was earning about $50,000.

So, that $112,000 purchase price was just 1.2x our combined salary—well within our means.

Still, I was losing my mind over what was, to my mind, the pathway to financial hell.

And now a starter home is more than a million bucks!

As Zillow notes, that’s not just high-dollar West Coast and East Coast cities. There are cities in Texas, South Carolina, Wyoming, Kansas, Missouri, and others where first-time homebuyers have to come up with a million dollars to buy a basic home.

Again… lunacy.

Now, to be sure, the median home price in America is not a mill.

According to FRED, the database of econ statistics overseen by the Federal Reserve Bank of St. Louis, the median home price in America in 2023 was nearly $427,000. But even that moves us into the realm of lunacy.

I say that because FRED also notes that median household income for 2023 was $80,610.

Taken together, those two numbers say that the average home today is more than 5x the average family income.

When I freaked out with my first home purchase in 1993, the ratio was 2.04 (and my purchase was just 1.19x my family’s household income.

Here’s what that trend looks like over time, per the FRED data that I culled and combined…

I and my current wife Yuliya have toyed with the idea of maybe living in the US again. Her ex-husband (her son’s dad) lives on the East Coast and she likes the idea of her son growing up nearer to his dad. As a dad myself, I understand that at a visceral level.

But then I see data like this and I wonder what kind of lifestyle downgrade we would suffer simply because the cost of living in the US not only jumped the shark, it jumped the whale and then followed the cow that jumped over the moon.

What could we even afford in America today anywhere near where I’d want to live (eastern Tennessee, western North Carolina, Vermont, New Hampshire, Maine)?

All of which brings me ‘round to the real point of today’s dispatch: Replicating American life outside of America.

I honestly don’t know how Americans do it—how they afford life in America.

I saw a stat reporting that roughly 6% of Americans hold a second job, just to get by. That’s lower than I expected. But then I saw that nearly 40% have a side-hustle of some kind to help make ends meet… and when you look at the millennials and Gen Z, the number of side-hustlers spikes to 44% and 48%, respectively.

The number of Gen Z members with a second job is somewhere between 46% and as much as 71%, depending on the survey. And 47% hold three or more jobs. For whatever reason, dual-job millennials run between 26% and 46%.

The overall point is this: The American Dream is, if not dead, entirely out of reach for much of America. Millennials and Zs, the next two generations after the Xers (my generation), want the vaunted American Dream, but a UCLA study released earlier this year showed that 60% of the younger cohorts think it will be too difficult for them to achieve the dream personally.

Last summer, Pew Research Center reported that 30% of millennials and Zs now feel the dream is out of reach. As recently as 2017, more than 80% believed they were living the American Dream or on their way to achieving it.

It’s at this point where I would usually say that it’s time to give serious consideration to chasing the New American Dream overseas, where it’s alive and thriving. (And you absolutely should consider that because it’s going to give you a happier, healthier, safer, more affordable, and more engaging and adventurous lifestyle.)

Instead, I’m gonna turn down a darker alley…

What happens when people give up? When they determine that they truly have nothing to lose but a life and a lifestyle they’re unhappy with?

Revolution.

It’s history’s long-accepted tonic for upending the status quo.

Russians revolted to throw off the yolks of the imperial class.

The French revolted to get rid of an uncaring monarchy.

Iranians revolted against a king and his brutal, corrupt, and oppressive regime.

American colonists revolted by telling King George to get bent.

Society is not so advanced emotionally that revolution is now a thing of the past.

The past is never very far from the future.

So, here’s what I suspect: America is on a path toward a new revolution.

The middle class is already radicalized. That’s been happening for decades as America’s corporate class has shipped millions of jobs overseas to replace high-cost American workers with low-cost foreign workers.

Everyday Americans are livid at the lifestyle decline they’ve suffered. They’re livid that they have to rely on credit cards to live a basic life. They’re incensed that they have to work two more jobs or take on side-hustles because there’s not enough pay in the check to make it to the end of the month.

The rise of Donald Trump is a symptom of their fury.

No one cares about his past to the degree that they would in previous generations. They don’t care about his felonies, his coarseness, his lack of civility.

They’re simply betting on him to burn down the system so that a new, better, fairer America can emerge.

I’ve said this before, and I’m certain I’ll say it many more times, but I don’t blame them. I understand their actions. I see their point of view.

America has simply lost the plot.

The country’s leadership has grown fat, dumb, and happy through corruption and questionably legal—and certainly immoral—activities like, oh, say, trading stocks on inside information politicians glean from their roles on subcommittees and such.

The middle class, meanwhile, has fallen farther and farther behind, as that chart above indicates.

Million-dollar starter homes might just be the beginning of the revolution in the offing.