This is an interesting "investment" example. In addition to the listed trade-offs, the mortgage would've likely allowed 25% cash down in 1976, approximately $18,000. Furthermore, savings in rent would've largely gone toward mortgage interest, repairs and capital expenditures. Given these assumptions, the result over a 40 year period would be an annual return of 10.12%[0].
Even so, the approximate return from the S&P 500 (reinvesting dividends) over the same period would be 11.468%[1].
[0] http://www.moneychimp.com/features/portfolio_performance_cal...