Key Takeaways

The American Dream has historically meant each generation achieving greater prosperity, driven by equality, justice, and democracy.
Baby boomers focused on homeownership and stability, but millennials and Gen Z face barriers like rising home costs and student debt.
Despite economic shifts, many Americans still see the American Dream as achievable, but perspectives differ significantly by age group.

At its core, the American Dream is the belief that every generation should enjoy greater prosperity than the generation before it, though its meaning has evolved over time. It originated with the ideals of equality, justice, and democracy but later became associated with individual prosperity and milestones, such as getting married, buying a home, and having children.

Economic and social changes have also shaped how different generations view the American Dream. What it meant for baby boomers, for example, may be different from what it means for younger generations. This article examines how the American Dream has changed and what it means to different generations today.

Traditional Perspectives on the American Dream

For baby boomers, born between 1946 and 1964, attempts to achieve the American Dream have centered on traditional milestones of stability, such as purchasing a home and car, getting married, and having children. However, their ability to achieve that dream varied starkly depending on race.

Baby boomers came of age during a time when the United States enjoyed considerable wealth and economic security, arising partly from the country’s predominant global standing in the second half of the 20th century. The U.S. emerged from World War II economically strong and brimming with confidence. It didn’t have the rebuilding-related debt European countries did, and the factories once used to construct wartime goods were retooled as engines of economic growth and job security. The 1944 GI Bill of Rights, for example, subsidized education and home purchases for veterans. These trends allowed the parents of many white baby boomers to find secure, well-paying jobs, which drove patterns of high consumption. A large percentage were able to own a home, drive a new car, and have two or more children because they could afford it.

This expression of the American Dream, however, tended to be exclusionary because the first part of this period predated the 1964 Civil Rights Act. Only some people enjoyed the wealth and benefits associated with this time in American history. Some of the very programs aimed at improving economic mobility served to exclude many from prosperity, such as in the redlining that began during Franklin Delano Roosevelt’s administration and segregated America, pushing resources away from communities of color. During the FDR administration, to focus on that one example, federal housing policies refused to insure Black housing, in effect demanding segregation and setting up racial dynamics that continue to have an impact. Similarly, Black veterans of World War II did not enjoy the same benefits white veterans did.

The Evolving Nature of the American Dream

Originally, the American Dream meant “equality, justice, and democracy” for the country, having become popular as part of the Progressive Era’s reaction against what they saw as the material obsession and business corruption of the Gilded Age, historian Sarah Churchwell says. The term was popularized in 1931, during the Great Depression, by James Truslow Adams in his book The Epic of America. It was repurposed by successive generations, becoming indelibly connected to a consumer capitalist vision of society and the notion of individual wealth during the Cold War. The concept has resurfaced memorably throughout American history, including in Martin Luther King Jr.’s “Letter From a Birmingham Jail.”

Since the 20th century, changing economic and social realities have challenged—and sometimes dislodged—these traditional notions about the American Dream. Younger generations have seen a marked increase in gender equity in employment, as well as in educational credentials. They are more racially diverse than earlier generations, though continuing disparities continue to favor those who grew up in affluent, educated, predominantly white families. And, at the same time, student loan debt has ballooned.

Contemporary Challenges to the American Dream

Only half (53%) of Americans say the American Dream is still possible, a 2024 report from the Pew Charitable Trusts found. And according to the report, there are significant generational differences. Only 39% of respondents ages 18 to 29 and 43% of respondents ages 39 to 49 said the American Dream is still possible, compared to 61% of respondents ages 50 to 64 and 68% of respondents age 65 and older.

Important

Average wages, while much higher now, have about the same purchasing power as they did 40 years ago, according to a 2018 Pew Research Center study.

So what does the American Dream mean to generations raised in the late 20th and early 21st centuries: Generation X, Generation Y (millennials), and Generation Z (zoomers)?

Looking back at Generation X, the generation born between 1965 and 1980, Pew reports that it sits at a crossroads in the history of economic mobility and stability in America. Gen Xers seem to be doing less well than baby boomers. The underlying economic reality has changed, and so has the way that younger generations think about the American Dream, though perhaps less drastically. But this isn’t only true for Gen X.

One generation down, the millennials—who have been affected by the Great Recession and rising student loan debt—emphasize freedom and financial well-being when thinking about the American Dream. Millennials rank pursuing their passions much higher as part of the American Dream than older generations do, with almost half (47%) saying as much, according to the Bank of the West study. Only 29% of Gen X—and 27% of baby boomers—feel the same way.

Remaining debt-free remains a top priority across generations. Being debt-free is the second-most-important ingredient of the American Dream for millennials—and the third for Gen Xers and baby boomers, according to the Bank of the West study. Baby boomers are still ahead of the pack in thinking so (61%), followed by millennials (51%) and Gen Xers (50%).

The top component of the American Dream for boomers—not surprisingly, given that many are of retirement age—is retiring comfortably (73%). For Gen Xers, retirement tied for the top component with owning a home (both 59%). And millennials ranked it No.3 (49%). Children, marriage, and owning a car are all farther down the list.

According to the 2022 Investopedia Financial Literacy Survey, generations differed on how they expect to support themselves in retirement. Gen Xers and baby boomers predict Social Security benefits will make up the bulk of their retirement income, followed by 401(k)s and pension plans. Conversely, younger generations expect that 401(k)s will be their main source of retirement income, though they’re still planning on having Social Security benefits to support themselves.

Homeownership and the American Dream

Home prices have risen dramatically compared to average wages over the past several decades. In 1960, according to the U.S. Census Bureau, the average income for a family was $5,600, and the median home price was only two times that, at $11,900. In 2022 (Q4), in contrast, the median home price was $442,600, which was nearly six times the median yearly salary ($74,580). This is one potential explanation for why Gen X, millennial, and Gen Z Americans seem less interested in homeownership than baby boomers were. Owning a home feels more and more out of reach.

Just 56% of millennials and 59% of Gen Xers see homeownership as the top ingredient of the American Dream, compared to 68% of baby boomers, according to a 2018 study by Bank of the West. Despite this, homeownership was still the top goal for millennials and Gen Xers. For boomers, it was the No.2 goal after “retiring comfortably” (73%).

Notably, more millennials and Gen Xers have expressed regret at having purchased a home than baby boomers have. The relative expense of homeownership, rather than an ideological distaste for homeownership, may explain this. More than two-thirds (68%) of millennials and 55% of Generation Xers who have bought a home have regrets, compared to just 35% of baby boomers, the study found.

What Is the American Dream?

The American Dream is a concept central to the American identity, which holds that each generation will do better than the last. The concept has evolved considerably over the 20th century, becoming connected to a consumer capitalist vision of society.

Is the American Dream Different for Different People?

Yes. The concept, originally popularized in 1931 by James Truslow Adams, has been redefined by successive generations—and indeed differs from person to person—though it usually includes some notion of access to opportunity.

How Do Millennials and Zoomers Think About the American Dream?

The Great Recession, among other things, changed the economic reality of the United States, which might have caused some changes in the way younger generations, like millennials and zoomers, conceive of the American Dream. Some studies have suggested younger generations emphasize freedom over the postwar hallmarks of homeownership and family.

The Bottom Line

The concept of the American Dream is a kind of American civic religion that is intimately connected to the notion of a classless society and may draw its roots from the frontierism in early and 19th century America—and to a secularized version of the religious yearnings of early American settlers. Debates about what the American Dream is, what it means, and who has access to it have been points of contention historically, and continue to be. The concept will likely continue to evolve along with the realities of life in America.

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How Each Generation Views the American Dream