A hearty mmmeeehhhh to the idea that the median household cannot save 10%. Proof by existence: 50% of families live on less than the median. Probably at least 35% live on 10% or more less than the median. At that point it's a matter of priorities.

Not saying life is cushy in this situation by any means. And of course there will be many families that cannot save enough. But it is doable if someone wants to make it a priority.

I agree with you, additionally it's important to understand the concept of a "starter home." These homes may be much older, in less than ideal neighborhoods, and need you to put some sweat equity in them. The mistake I see some young people making is being unwilling to accept a home of lower quality than the ones their parents currently live in. They often don't see that this is their parents' second or third home that they've upgraded to. I don't blame the young people, I think this is a failure of the parents to set reasonable expectations of how to build a life.

FHA gives loans at 3.5% downpayment.