> What happened to saving for something, and then when you have the needed money, buying it out of pocket?

For buying houses? There was never an era where that was a particularly normal thing to do; in most countries home ownership becoming common came about as a result of mortgages.

If the price of a house was directly related to its actual building cost, and considering how much deposit one needs nowadays, it isn't a bad idea.

Cost of new house construction in the Bay Area is on the order of a million dollars. Still need a mortgage.

But before mortgages were common, people had to buy houses 100% upfront if they were to own them.

> I know I will never be able to buy a house. That is why I rent.

It really depends on your local market, but for my specific case (France, Paris area), it's cheaper to buy if you stay there for ~5 years than to rent. I had some extra help from government programmes encouraging homeownership, town redevelopment and new constructions through lower taxes/cheaper loans, IIRC the generic advice for my area is ~6-7 years. Also it's technically not a mortgage because the place itself isn't collateral and it won't be immediately repossessed if I stop paying the bank, but that's just how things work here. Loan rates being what they are, there's very little incentive to save upfront for decades to be able to buy outright.