Cash.
Save up, buy a house with cash.
Swallow your pride, look for something nice yet inexpensive, and buy it outright.
Stay the he11 out of debt.
The whole “mortgage meltdown” thing is the result of people buying more than they could afford, in an area that was overpriced because everyone bought into the “I’ll pay later” BS of loans.
If I had enough cash to buy a home outright, I'd make the smallest down payment I'd need to avoid having to buy mortgage insurance (I believe it's 20%), then spread the rest of the cash in a diversified group of investments that can be liquidated relatively easily if necessary.
Obviously you live somewhere away from the big cities of the East or West coast.
There’s no way on God’s green earth you could ever save enough cash to buy a home in those areas unless you live with your parents and don’t pay rent. Or, conversely, make an insane amount of money.
Besides it’s stupid to pay cash for a house if you have money. Leave the money invested and earn more than you pay in interest.
Very few wealthy people buy their homes with cash, and there’s a reason. And by wealthy, I mean someone with a good income AND good asset balances, NOT high-income but living paycheck to paycheck.