When and why did banks start owning houses and land? When did mortgages start?
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By the time most people could save up enough money to buy/build a house outright, they’d be too old to start a family, etc.
So mortgages are a way to get the house when you need it, when you’re starting a family, etc. The banks pay the seller, and then you pay back the bank with interest over time, so that you have use of the home when you need it even if you won’t fully own it until you’re much older.
Banks don’t own houses as inventory to sell like a store owns pairs or shoes, etc. They just lend you the money when you buy the house from the previous home owner, thus becoming your partner in owning the house. Say you put down 20% down payment and get a mortgage for the remaining 80%, then it’s like the bank owns 4/5 of your house. Over time, as you pay down the loan principal and the house appreciates in value, your stake goes up and their stake goes down.
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