I used to think like you but there are quite a few things that justify this * Out of the 5K some fraction, say 2K, is going towards the principal (i.e. it is b

I used to think like you but there are quite a few things that justify this * Out of the 5K some fraction, say 2K, is going towards the principal (i.e. it is building your wealth). So now we are down to the same 3K you were paying for rent * The government encourages home ownership with tax breaks. Out of the 3K left some part becomes tax deductible (mortgage interest and property taxes) until a cap. Say this is ~800 per month. So now you are already down below 3K * The amount you pay is fairly fixed over long periods (10, 15, 30 years) based on your mortgage while the rent keeps going up. * Finally, you get to pass this on to your heirs without paying any taxes on the gains (hence building generational wealth)