At the "Cooperative Organization" food distribution station in Chelsea, Massachusetts, staff and volunteers are sorting donated food, preparing to distribute it to those in need.

The "American Dream" has never felt more out of reach. This isn't just because a house with a white picket fence and a nanny to care for the children have become unaffordable—for many, these things are simply unavailable, regardless of price.

An "unaffordability crisis" is real in the United States. A softening job market is leading to smaller pay raises, while prices, especially for essentials like groceries and electricity, continue to climb.

Yet, in recent years, wage growth has actually outpaced inflation, and many Americans have significantly higher incomes than before the pandemic. So why does this pervasive economic pessimism persist?

The answer may lie more in what Americans cannot obtain, no matter how much money they spend.

Consider the two major areas of housing and childcare. Years of stagnation in the real estate market have not only dashed the homeownership dreams of a generation of first-time buyers but have also forced growing families to squeeze into undersized homes. In much of the US, there are simply not enough childcare providers to meet the needs of working parents.

This leaves many Americans in a frustrating predicament: some, despite earning more and moving into higher tax brackets, cannot enjoy the quality of life typically associated with higher incomes; others feel the gap widening between themselves and their peers.

The housing problem has intensified in recent years, primarily due to a prolonged market stalemate combined with mortgage rates exceeding 6%—triple the rates seen in the immediate post-pandemic years.

Data from the National Association of Realtors shows that US existing-home sales have been sluggish for years, hovering around an annual rate of 4 million units since late 2022. Apart from a brief uptick in the spring of 2020, both housing inventory and sales volumes are at historic lows since the market bottomed in 2010.

Compounding the issue, new home construction nearly halted during the 2007-2009 housing crisis and never fully recovered. According to Goldman Sachs Research, the US currently faces a housing deficit of approximately 4 million units, a gap that must be filled to alleviate the supply shortage and restore affordability.

More starkly, the total number of vacant homes for rent or sale has fallen to its lowest level in the past four decades.

Chen Zhao, Head of Economic Research at Redfin, stated, "The housing affordability problem we face is, at its core, a supply issue. There is a complete mismatch between areas with concentrated job opportunities and areas with affordable housing."

The fastest-growing real estate markets are often clustered in job-rich areas like the New York and San Francisco Bay Area metropolitan regions, yet these are precisely the places where building new housing is most difficult.

Kim Sheldon and her three children have lived in the same rental house in Holden, a suburb of Worcester, Massachusetts, for ten years. While satisfied with her current home, she still finds herself looking whenever a nearby property is listed.

"I thought to myself, 'These houses look really nice, let me check them out'," she said. "Then I saw the price: $650,000 for a three-bedroom, two-bath single-level ranch house."

As a single mother on a teacher's salary, she feels the "American Dream" has never been further away.

"I finished college and have always worked hard. But with prices so high now, we are just scraping by, certainly not living comfortably, though we don't need a luxurious life," she said. "Of course, I wish I could own my own home; that would be wonderful."

Yet, she worries that the financial strain of a mortgage would impact her children's lives.

Housing prices are significantly more affordable in the Sun Belt states of the South: Texas, Florida, and Georgia are among the states where building is easier and housing relatively affordable. However, as companies increasingly enforce "return-to-office" policies, forcing relocations—including for those who previously leveraged "housing arbitrage" by working remotely from lower-cost areas—the appeal of the Sun Belt has cooled somewhat.

Even in these regions, certain segments of the housing market remain prohibitively expensive.

Today's homebuyers find that scarce inventory is pushing prices up while mortgage rates remain above 6%—far higher than the sub-2% rates some enjoyed during the pandemic.

"Nobody wants to sell right now because they don't want to give up their low 2% mortgage rate... There's immense pressure on the supply side," said Steve Mersereau, adding, "The reality is tougher than I anticipated. Combined with across-the-board price increases, the burden of buying a home has become even heavier."

Baby boomers who bought homes when prices were generally lower and saw them appreciate, and who secured mortgages when rates were high but then fell, effectively won the lottery, accumulating substantial wealth. But today's buyers face stubbornly high prices—which economists don't expect to fall significantly soon—and similarly high mortgage rates, also not forecast to drop dramatically in the near term.

"I think the younger generation feels discontented because they perceive the 'American Dream' as unattainable," Chen Zhao said. "Young people who can't even get a foot in the door of the housing market are truly stuck, and they don't see a way out."

Traditionally, housing has been the largest monthly expense for Americans. But now, for a growing number of families, the cost of childcare is a comparable, if not equal, financial burden.

According to the advocacy group Child Care Aware, in nearly every US state, the cost of childcare for two children exceeds the average monthly mortgage payment or rent. The organization found that the average annual cost of childcare in the US reached $13,128 in 2024, a 13% increase year-over-year.

Yet, behind the "unaffordability" of childcare lies an industry in distress. Research from the University of California, Berkeley, indicates that childcare providers are increasingly facing "dire financial straits."

William T. Gormley, Professor Emeritus at Georgetown University's McCourt School of Public Policy, noted in a recent interview, "The childcare issue also involves two other dimensions: accessibility and quality. These problems are interconnected."

When Mersereau and his wife lived in Iowa, they struggled to find childcare for their young son.

"We have a 16-month-old son. Due to a bad previous childcare experience and the extremely high cost, we ultimately brought him home," he said, noting that childcare in Iowa cost $1,800 per month. "It was very hard to justify sending him back to daycare, so now my wife has quit her job to care for him."

Chronic underinvestment and low wages for workers have led to staffing shortages—exacerbated by reduced immigration—and created vast "childcare deserts." Ultimately, the cost burden is shifted onto families, many of whom are often priced out of seeking care altogether.

Gormley, a scholar of early childhood education policy and co-director of the Center for Research on Children in the US, pointed out that childcare workers and early educators earn less than 97% of other occupations in the US.

"This is because, in almost every state, the childcare industry is on very shaky ground," Gormley said. "Some of the systemic challenges facing childcare stem from the relatively weak government support for childcare services in the United States."

Data from the Bureau of Labor Statistics shows that the pressure from monthly childcare costs is increasing for Americans: the cost of daycare and preschool is rising at nearly twice the rate of overall inflation.

Gormley explained that these rising costs hit families at one of the most financially challenging stages of life.

"These expenses are unavoidable; there's no way around them," he said. "The only way to avoid childcare costs is to stay home and care for your child yourself. But for many working families, that simply isn't a viable option."

The ripple effects of this problem on the labor market and the broader economy are concerning. A report released in April by the US Census Bureau's Center for Economic Studies indicated that rising childcare costs are directly contributing to a decline in women's labor force participation.

As childcare costs climb, many families are forced to cut back on expenses, and some parents—often mothers—are opting out of the workforce. This trend was particularly pronounced in 2025, reversing the historic post-pandemic gains in women's labor force participation. Women with children under five were the primary group leaving the workforce.