The Affordability Crisis? Here’s What Really Happened…

Everyone in America these days is talking about affordability. But nobody is talking about the right story.

So let me tell you that story—starting with a house on Tealwood Circle that my wife (at the time) Amy and I bought in Flower Mound, Texas in 1993. It says everything about where affordability in America went off the rails…

I was 27, living in an America where you still felt like every opportunity was in front of you—a feeling I bet you know. I had just signed on with The Wall Street Journal at a salary of $43,000. Amy was a nurse earning about the same.

Combined income, $86,000.

Amy and I were gen X kids, and that Tealwood house was our first—a new-build brick affair, three bedrooms, two baths. A two-car garage. And a black-bottom saltwater pool going in the backyard, where our Siberian husky would bite at the water, too scared to jump in. We rolled that pool into the loan as the house was being built.

Both cars in the garage were financed. Full health insurance for both of us. Restaurants whenever we felt like it (I really miss the chicken fried steak at the Black Eyed Pea!). We both contributed to our 401(k)s and funded a joint brokerage account on the side. We had credit cards but never carried a balance.

We felt exactly like every other couple on the street: just two kids in a starter subdivision, living an average middle-class life in an average middle-class home.

And yet it turns out that our combined $86,000 put us in the top 12% of American families by income. I only know that now because I went and pulled the Census data all these decades later as I was thinking about this dispatch.

To sit on that same rung of the family-income ladder today, a young couple needs combined income of roughly $246,000. And even at nearly a quarter of a million dollars a year, they still can’t buy the life Amy and I bought back in Flower Mound.

I looked it up. A house just down the street from our starter home is on the market right now for $540,000—almost five times what we paid. The saltwater pool that cost me $15,000 now runs about $70k. Family health insurance that cost us under $5,000 a year now carries a price tag closer to $27,000.

In 1993, buying that house, that pool, and one year of family health insurance added up to 18 months of our salary. For a young couple today, it’s nearly three years of theirs.

Let’s call it The Great Repricing.

And it raises the question nobody in the affordability debate is asking: Why did an average middle-class American life migrate so far away from the middle?

The usual explanations put a villain somewhere in our story—greedy corporations, lazy millennials and gen Zs. Neither is true to the degree both are vilified. And neither explains why the specific bundle of goods that defined the middle class in 1993 costs three times as much today.

The real answer is that America built legal, financial, and regulatory policies over 40 years—across red and blue Congresses—that made a middle-class life structurally more expensive.

Those policies choked supply so that starter homes became an increasingly smaller slice of the housing market. Medical systems swallowed independent hospitals, killing competition and raising prices. And in most American cities, one or two health insurers now dominate the local market—again meaning higher prices. The everyday things a middle-class family needed became genuinely harder to come by.

Take housing.

That house on Tealwood Circle isn’t $540,000 today because it’s a better house. It’s the same brick, the same slab, the same floor plan—just with 33 years of age and decay.

It’s $540,000 because decades of Federal Reserve policy—and severely constrained new housing supply—that pushed capital into anything scarce. And houses, by definition, are scarce, otherwise everyone would own one.

That’s monetary policy explicitly protecting asset owners with a side effect of locking out future generations.

Layer on top of that a healthcare system that consolidated into cartels. And a legal system that put disclaimers on everything. I mean, when a Dremel hobby drill carries a disclaimer that “This product is not intended for use as a dental drill”… let’s just say that you’re paying the bills for a legal system that has turned personal injury into a lottery ticket.

Enough of that over time and you end up with a middle-class life that now demands a minimum income above the 90th percentile.

Little wonder that 60% of gen Z say the American Dream is unattainable for them.

These are not lazy kids, and them moving back home these days is not a failure to launch. They’re the collateral damage of a system that repriced the American Dream beyond the means of the middle.

They’re caught between the middle-class self-image their parents handed them and a math that quietly moved the goalposts.

Today’s top 12% is barely holding on, while the actual middle… well, they’re looking up the ladder and wondering who the hell put the American Dream way up there?