Home debt has
traditionally been seen as "good debt" for a bunch of reasons, but the big ones were that
(a) Home loans meant you were accumulating equity in an appreciating asset; and
(b) Mortgage interest was enough to allow most people to take a larger-than-standard deduction on income taxes; and
(c) The relationship between home prices and the equivalent rental market meant you could probably have a nicer place for a lower monthly payment in many markets.
These were generally slam-dunk truths for decades, but in the last 20 or so years they've stopped being true.
Home ownership isn't the guaranteed rocket-ship to wealth it once was. Appreciation is spotty, and varies wildly by market. My own view of this is that a lot of the gains are now baked in, and we're unlikely to see the kind of rise in value (in real dollars) that characterized, say, 1990 to 2015. Last year I sold a townhouse in Houston that I'd owned since 2000; I made money, but not the kind of upside that you wanna write home about.
Second, the tax law changes in Trump's first term dramatically raised the standard deduction -- enough so that we stopped itemizing. Part of this was that we were deep into the mortgage, so we were paying less in interest every year, but it's still a factor.
Third, rents may be high now, but home prices and interest rates are higher. When I bought in 2000, I went from renting a place for $1200 a month to OWNING a place at a bit under $2k (including taxes and insurance). This was with 20% down.
In my old neighborhood now, a nice rental is gonna be $2500-$3000, and housing is just unattainable. First, 20% now means probably $90K. Second, servicing the loan is going to be more than the rent, plus you've got another $450 a month in property taxes AND probably another $450 in insurance. And you've got to accumulate the $90K somehow while paying $2500 in rent. It's crazy. I have no idea how a young person who isn't making top-5% income can afford to buy without family help.