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Warning: spoilers Do not read further if you do not want important plot points spoiled
The movie is about griefWhile advertised as a horror movie, especially in the trailer, Dream House is, at its core, a movie about grief, about how a man reacts to the loss of his family. The plot concerns Will Attenton, a successful publisher in New York City, who quits his job at GPH Publishing moves his family to the small New England town of New Ashford. His first night there, he sees a bunch of teenagers in his basement and chases them out. He soon learns the house was the site of a triple murder. Learning that the father of the family, Peter Ward, had survived, he tries to learn more about Peter. He initially thinks Peter had come back to stalk him and his family, but a visit to the Greenhaven Psychiatric Hospital reveals that he is Peter Ward. He is initially in denial, but seeing his "co-workers" as patients in the hospital brings him crashing to reality. He sits in the house alone, having a few more visions of his family, as he slowly accepts the truth. It is revealed the reason he lost his family was due to how his neighbor, Jack Patterson, reacted to the loss of his family. Jack was divorced from his wife Ann, and his wife had the house and custody of their daughter Chloe. It is revealed the divorce was on bad terms. Jack hired the hit man Boyce to kill Ann, but a slight mix-up in the driving directions resulted in Boyce killing Libby and the girls. Thus we have a contrast between Peter and Jack. One had turned his grief within, the other turned his rage without. Peter figuratively killed himself, living under the identity of Will Attenton and living a fantasy life. Jack tried to kill his wife, which resulted in killing Peter's family.
The movie relies on foreshadowingThere are several clues that Peter was imagining his life as Will. The earliest clue was in the scene just outside the GPH building. He was supposedly in New York City, and yet the traffic signal assemblies shown are not the ones used there, as any NYC residents reading this can attest. The more obvious clue is that Libby and the girls never speak to anyone besides themselves and Will/Peter. Ann turns around and leaves before Libby could "talk" to her. And two and two are put together when Peter sees his GPH "co-workers" as patients in Greenhaven Psychiatric Hospital.
Fantasy and Reality Book EndsIn the beginning, we have Peter imagining his life in New York city as publisher and author Will Attenton. In the end, we have Peter really in New York City as an author using his real name.
Peter's internal conflictPeter clearly had a conflict between wanting to deny his very existence and wanting closure over his family's death. Peter did not use the convenient methods of looking into his past, such as Googling his name. And yet he wanted to do research into Peter Ward, instead of simply burning all of the reminders of the Ward family. His desire to deny his past manifested itself in Libby's image. Libby had insisted the girls were sick with fever, while Peter saw the gunshot wounds on the girls. Similarly, Libby was reluctant to talk about what happened the night of the shooting. Finally, Libby never supported Peter's quest to find out what had happened.