[kamikazeturtles]

Students stay in dorms "for the experience".

I don't think any middle aged person is looking for any communal living type experience.

Also, what do you mean by "short term"? Usually it only makes economic sense to buy a house if you plan on staying there for 5+ years otherwise closing costs and realtor fees eat away any savings you made from not renting. The period of our life where we are the most mobile and willing to change cities due to job changes (20-40yrs) is also the period in our life when people start families and have children.

I think most people prefer houses

[taeric]

Don't forget that apartments are a thing. And are far far cheaper than houses. Both in terms of direct rental costs, and in terms of upkeep. Heck, the plumbing and electric are probably magnitudes cheaper to maintain for an apartment block than for a subdivision.

Directly to your first, though, most people stay in dorms for college because that is the best that they can afford. New students moving to a city to go to school almost by definition can't afford a house. I don't imagine that would be easy to ever change.