I found an excellent article on renting versus buying in an unlikely source, Metropolitan Home. Here are their reasons why you should rent, and some numbers to back it up:
1. Homes won't appreciate in value the way they have been up to this point. The average price of a single family home this past May was $206K while last year it was $223K.
2. Financing is harder to get these days. A 30 year morgage rate is 6.5 percentbut since the housing bubble banks are tightening their requirements for loans.
3. Renting is less expensive. Between 1996 and 2006, real rents increased 4% while house buying costs were 20 times this, and that is not factoring in additional fees like closing costs.
This made me wonder: is this the advice being given out these days to perspecitve home owners? The New York Time's recent look at Rent Vs. Buy for me sums it up: be especially cautious now and don't buy what you can't afford. Makes sense to me.
So in the meantime, I'm a 27 year old with no property of my own, putting away 20% of my income for that time in my life when I will be ready to buy. Unlike some trendy outfit I regret purchasing, this is not a decision I want to rush.