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How much does it cost to live the 'American Dream' in North Carolina?

(NEXSTAR) — For years, the American dream seemed attainable. A home with a yard surrounded by a picket fence; a dog named Fido or Spot running around with your two kids as you come home from a nice job where you get paid enough to afford the aforementioned space. 

But, following multiple years of stubborn inflation, coupled with a housing market that refuses to cool and a trend of mounting debt, achieving the American dream has become, to some, just a dream. Even more recently, an analysis found that most American households would need to spend $10,000 or more just to afford the same goods and quality of life they had in 2021.

A new report, released earlier this month, found that in every state, you need to earn at least six figures to achieve the American dream.

Personal finance site GoBankingRates considered the costs of multiple metrics that could be used to define the “American dream:” being a married couple with two children living in a home for four with a car and a pet; plus annual groceries, pet care, a mortgage, healthcare, utilities, education, and child care. That total was then considered 50% of the household’s income, following the oft-used 50/30/20 budgeting technique (50% for needs, 30% for wants, and 20% for saving or paying down debt). 

Following recent trends (more on that in a moment), the analysis found that in states along the coasts, the costs required for the “American dream” were much higher than in the South, Midwest, and Plains.

Nowhere is the American dream (at least the one described in GoBankingRates’ report) more expensive than Hawaii. Fueled in part by high housing and grocery costs, residents in Hawaii would need almost $260,800 to afford the idyllic life. That’s roughly $15,000 more than California, which only outranked Hawaii in two categories: annual car costs, and annual child care costs. 

In four other states, residents need to earn more than $200,000 to get a house with a picket fence: Massachusetts, Washington, New Jersey, and New Hampshire. 

The cheapest state was Mississippi, where GoBankingRates found you would need less than $110,000. Compared to Hawaii (and most other states on the list), Mississippi had the most affordable housing costs, which largely contributed to top ranking. In six other states, the American dream costs less than $125,000: Arkansas, Kentucky, Alabama, West Virginia, Louisiana, and Oklahoma.

The interactive map below shows the cost of the American dream in each state based on GoBankingRates’ analysis. Hovering or tapping on each state will also show you the median household income in each, according to the U.S. Census Bureau’s American Community Survey’s 5-year income estimates.

In every state, the median income is well below the total costs outlined to afford the “perfect” life. In Mississippi, for example, the median household income was just under $53,000, roughly half the $110,000 needed for the “American dream.” Hawaii and California had the largest disparities between dream-life costs and median household income at roughly $166,000 and $154,000, respectively. It’s worth noting though that the Census defines a household as anyone living within a housing unit, which could be anything from an apartment to a mansion. 

Overall, GoBankingRates’ findings were largely in line with other recent analyses showing how affordable — or unaffordable — life is nationwide.

Earlier this month, Bankrate reviewed home price data and determined that in 22 states, you need to earn at least $100,000 annually to afford a median-priced home. That’s up from six in 2020. California topped the list at just over $197,000, with Hawaii close behind at more than $185,800. 

Mississippi again ranked as the most affordable, where an annual salary of slightly more than $63,000 is enough to afford a median-priced home. The four other most affordable states were Ohio ($64,071), Arkansas ($64,714), Indiana ($65,143), and Kentucky ($65,186). Two of those states, Arkansas and Kentucky, also ranked on the lower end of GoBankingRates’ American Dream study. 

Affordability can also vary based on the metro you live in or near. Personal finance site SmartAsset recently ranked 99 of the nation’s largest cities to determine the pre-tax salary needed to “live comfortably” in each

In that study, researchers found cities in Texas — a state that ranked roughly in the middle in Bankrate’s and GoBankingRates’ studies — were among the most affordable for individuals and families. Ranking No. 1 in both categories was Houston, a city that also stands as one of the most impacted by rising inflation

Regardless of where you live, you’re likely still feeling the effects of inflation: the U.S. now has a record number of cities where the “typical” home is worth more than $1 million; homeownership has become “unaffordable” in 57 counties; and various goods and services — from car maintenance to frozen drinks — are seeing prices rise.

Though it has tumbled from a peak of 9.1% in the summer of 2022, inflation has remained elevated so far this year. Prices excluding volatile food and energy costs, rose 3.8% in March from a year earlier, the same as in the previous month and well above the Federal Reserve’s target.

The average long-term U.S. mortgage rate also recently rose to its highest level in five weeks, a setback for prospective homebuyers during what’s traditionally the busiest time of the year for home sales. When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices.

So even if you live in a relatively affordable state, the dream of a white picket fence may remain out of reach for some time.

The Associated Press contributed to this report.

Source: Fox 8 News Channel

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