Homeownership and the American Dream
Are often described as unaffordable today. I keep seeing people claim that renting is more affordable than owning, and that idea simply doesn’t hold up, yet it’s surprising how many people believe it. The truth is, buying a home has always been expensive, no matter the decade. If you compare what people earned in the 1920s to what homes cost, it was just as stressful, if not more so, to come up with a down payment and qualify for a loan.
In fact, back then programs like FHA didn’t even exist. The Federal Housing Administration was created during the Great Depression to make homeownership more accessible, especially for those with lower incomes. FHA doesn’t lend money directly, it insures loans made by approved lenders, reducing their risk and allowing buyers to put less money down. While a 20 percent down payment is ideal, FHA loans typically require around 3.5 percent, and there are programs available to help with that. USDA loans can require even less, sometimes offering zero down options.
The Numbers
When you look at the numbers, the barrier to entry isn’t as high as many think. On a $100,000 home, a 3.5 percent down payment is $3,500, which is often comparable to what people spend on deposits and moving costs for a rental. In many cases, that amount is similar to a tax refund. A mortgage on a $100,000 home, including taxes and insurance, might be around $700 per month, give or take depending on credit and down payment.
Spending habits
So why aren’t more people buying homes? There are three main reasons.
First, spending habits. In the past, people had fewer costly entertainment options. They spent time at home, with family, music, games, and community gatherings that cost little or nothing. People packed lunches, cooked meals, drank water, and avoided unnecessary daily expenses like expensive coffee or frequent dining out. They prioritized saving over spending on nonessential items.
Second, a lack of credit education. Many people don’t fully understand how credit works or how to use it effectively. There are two main types of credit, long term credit such as mortgages, car loans, and student loans, and revolving credit like credit cards. While all loans require on time payments, revolving credit requires careful management. High interest short term loans and cash advances can be avoided entirely if credit cards are used correctly.
Building good credit
The key is to start with no annual fee cards that offer cash back. If your credit is low or nonexistent, a secured credit card is a good starting point. You deposit an amount equal to your limit, for example $300, and use the card responsibly. Keep your balance low, around 10 percent or less of your limit, and pay it off in full each billing cycle. This avoids interest and earns rewards. The most important rule is to only use the card for purchases you already have the money to cover, essentially treating it like a debit card.
False Beliefs
Third, the belief that renting is cheaper than owning. Many people argue that maintenance and repairs make home-ownership more expensive, but when you rent, you are covering your landlord’s mortgage, insurance, taxes, maintenance, and profit, while they gain the equity. As of early 2026, average rent in the U.S. ranges roughly from $1,740 to $2,000 per month for about 900 square feet, with costs varying widely by location. Meanwhile, a modest home with a $700 mortgage creates a potential monthly difference of $250 to $750.
If someone saved even half of that difference for maintenance and invested the rest, they would be building equity, growing their net worth, and reducing financial stress over time.
But you don't understand Argument
I understand these challenges personally. I used to struggle with spending and credit, and it took time to figure out how to change. Eventually, I realized I didn’t need to spend money to enjoy life or maintain strong relationships. I started saving, using coupons, and being intentional with spending. Over time, that led to purchasing land, which we used as a down payment on a construction-to-FHA loan. We built a smaller home for under $100,000, and within a few years its value more than doubled.
That didn’t happen overnight, and it didn’t happen by accident. It came from changing how we thought about money, improving our habits, and choosing to invest in our future.