Picture this: owning a well-appointed single-family home in a prosperous suburb. Perhaps there’s a picket fence around the yard and a couple of kids or a dog playing on the lawn. This is our image of the American Dream, frozen in time since the years following World War II.    

The homeownership rate in America has consistently hovered between 60 and 70 percent since the 1960s, according to Business Insider, seemingly signaling that, for the majority, the American Dream is alive and well. However, over that same period, the definition of the American Dream drifted from being part of an idyllic community to being a homeowner. We argue that the dream of upward mobility and economic prosperity isn't driven by the financial investment of owning a home but by access to communities.

Research from the National Bureau of Economic Research shows that where someone lives significantly impacts their ability to achieve upward economic mobility. These places, which we call “opportunity neighborhoods,” have good schools, infrastructure, health care, and access to steady, well-paying jobs. To expand the American Dream, we need to increase access to opportunity neighborhoods and high-quality single-family housing for everyday families that, for a myriad of hard-to-solve problems, are renting rather than owning.

The single-family housing market has rarely been more in-demand—or more undersupplied.

As with many contemporary housing discussions, today’s access issue largely stems from the Global Financial Crisis (GFC), when credit requirements for obtaining a mortgage tightened significantly. Our research concludes that this reduction in credit prevented over 9 million credit-worthy families from buying homes. Furthermore, over this same period and due to related credit contraction issues, a deficit of approximately 3.8 million single-family homes was created by a steep decline in home-building activity, the US Census Bureau reports.

What the GFC started with the contraction of credit and reduction in buildings, COVID accelerated by providing a surge in demand for large spaces in southern markets and generational lows in mortgage rates. The housing stock we do have has been “locked in” and “locked away” with irreplaceable mortgages for today’s lucky owners.

With this backdrop now enters the large cohort in need of new housing—millennial adults from ages 25 to 40. This group is estimated to create another 2.5 million households over the next decade and is more likely to have lower FICO scores and lower household incomes than previous homeowning generations. A large share of these families will need high-quality rental housing that fits their growing needs. Unfortunately, 90 percent of multifamily units have two bedrooms or fewer, according to the National Multifamily Housing Council. The single-family housing market has rarely been more in-demand—or more undersupplied.

The ability to make a down payment or meet the very high hurdles of today’s mortgage market should not define an individual’s ability to attain upward economic mobility. That is the antithesis of the American Dream, and the millions of renting families in the US, or one-third of the American population, deserve better. They deserve our innovation, our investment, and a collective effort across the real estate ecosystem to expand their housing choices.

To serve these families, we need more houses—millions of them, for sale and for rent. These can be traditionally onsite-constructed, but they can also be off-site constructed modular homes or renovated from existing housing stock.

By having a more expansive vision of housing, we can embody the principle that everyone deserves a chance at the American Dream, regardless of their financial circumstances or credit. How do we do this? We become less interested in how a house is capitalized and more interested in supporting Americans along their housing journey, whether that is through renting or owning a home. Further, we prioritize development and preservation of accessible, high-quality rental homes in opportunity-rich neighborhoods. Any solution to the complex challenges facing US housing today cannot be viewed as zero-sum and must focus on how we can dismantle barriers to economic mobility and, in turn, increase access to the American Dream.