Scott Galloway warns the American Dream is now a ‘hallucination’ — says young people have given up because it’s almost impossible to buy a home. But has it ever been ‘easy’ in the US?

“When I got out of business school, the average salary was $100,000. I went to a quote-unquote elite business school … The average house in San Francisco cost $280,000, so 2.8 times the MBA salary,” Galloway recounted in a recent appearance on the Jay Shetty Podcast.

“Now, the kids at Haas — still an elite business school, incredible compensation, average $200,000 right out of business school — but the average home in San Francisco is $2.1 million.”

In other words, while elite graduates are earning more than previous generations, the sheer surge in home prices has left them far behind.

Galloway believes the problem stems from the reluctance of existing homeowners to allow new construction in their neighborhoods.

“As soon as you have a house, you become very concerned with traffic, and you start showing up to local review meetings and making sure no new housing is built, which is great if you already own a home,” he explained.

A recent Zillow report estimates the U.S. faces a shortage of 4.7 million homes.

Dream, hallucination or fantasy?

Galloway has a blunt assessment of the situation.

“I think young people have given up on the American dream of owning a home,” he told Shetty.

He pointed out that conditions have shifted dramatically against new homebuyers since the COVID-19 pandemic.

“Pre-pandemic, a house is $290,000. Post-pandemic, it's $420,000. Interest rates [went] from 3% to 7%, [the] average mortgage went from $1,100 to $2,200,” Galloway noted. “All of a sudden, the American dream has become a hallucination, a fantasy.”

Research suggests that over the years, homeownership has indeed become substantially more difficult for Americans.

According to a 2024 Zillow study, buyers now need to earn more than $106,000 annually to comfortably afford a typical U.S. home. This calculation assumes spending no more than 30% of income on the monthly mortgage with a 10% down payment. In 2020, that income threshold was only $59,000 — meaning the required earnings have jumped by 80%.

Zillow also noted that in 2020, the $59,000 needed to buy a home was actually less than the U.S. median household income of $66,000 at the time. That’s no longer the case. Today’s required $106,000 is well above the median.

“Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains,” Zillow Senior Economist Orphe Divounguy said in the report.

How to get on the real estate ladder — starting with $100

Given these challenges, Galloway noted that for young people, saving for a home today ‘“is almost impossible.”

Yet despite the hurdles, real estate remains a popular investment choice for those looking to hedge against rising living costs. When inflation goes up, property values often climb as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to rise, providing landlords with a revenue stream that adjusts with inflation.

While buying an entire house may feel out of reach, it’s now easier than ever to start investing in real estate thanks to crowdfunding platforms like Arrived.

Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.

The process is simple: Browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase, and then sit back as you start receiving positive rental income distributions from your investment.

Another option is Homeshares, which gives accredited investors access to the $35 trillion U.S. home equity market — a space that’s historically been the exclusive playground of institutional investors.

With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.

With risk-adjusted target returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.

Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a $250,000 down payment or 3 A.M. tenant calls.

Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide, guided by proprietary underwriting and market analytics typically used by large institutions.

Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10-12% annually.

Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.