"I'm paying too much in rent, I have to buy right now," says the 28-year-old hotel worker. "I'm not winning in this situation. I'm already making a mortgage payment."

Rent payments of $1,360 per month only fuel the Orlando resident's frustration and drive to become a homeowner sooner than later. But in many respects, Curry is already ahead of the game. Many other low- to moderate-income earners have already talked themselves out of owning a home.

So say bank officials, who think that many otherwise worthy candidates are too quick to dismiss their chances of home ownership. This keeps potential owners in a rent cycle when they could just as readily plow rent money into ownership.

The problem is particularly vexing for low- and moderate-income Americans. According to the U.S. Census Bureau, nearly 34 million people rent. That number is up slightly from the quarter before. By contrast, owners occupy nearly 74 million residences. This home ownership rate, or the percentage of Americans who own a home, stands at nearly 69%. These owners largely are in a position to see home values rise in most markets.

The numbers dip for ownership and rise among renter-occupied properties in the coastal regions most impacted by steep rises in home price, as reported by the Census Bureau.

The result, says James Jackson of the Bank of America, is that people automatically discount their ability to own a home. The problem, says Jackson, "is that people don't ask 'what if' even as we step up lending efforts to reach people on the outside looking in on what should be the great American dream."

Also surprising to low and moderate earners may be a loan process that has shifted away from the traditional 20% down payment and 30-year fixed mortgage that would otherwise throw a wrench into housing plans. Banks have expanded mortgage options to include low or no down payment and zero-interest plans. Also befuddling to many people is how to go about the process to explore home ownership.

But as banks have expanded loan offerings targeted at low- and moderate-income earners, they have confused some candidates. "It's very confusing, with so many different loans," Curry says. "I don't understand the whole loan system."

Of course, banks have a vested interest in encouraging as many people as possible to become customers because it is the first step to checking accounts and other investment products. Large lenders such as CitiGroup, Wells Fargo and Wachovia all promote loan products aimed at the first-time buyer among low- and moderate-income earners.

The rise in housing costs should foster a hurry-up attitude among renters who see no payback or growth in equity from rental dollars. According to the Joint Center for Housing Studies at Harvard University, one in three U.S. families spends at least 30% of household income on housing. One in eight spends more than 50%.

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