From my parents' point of view: You should buy a home so that you build equity into the place your living.

Your not "throwing" money away into someone else's pocket.

You will have a place to live for free, when your retired, if you paid it off before retirement.

Do you have a plan for the next 10 years? Do you plan on retiring at 65? Do you have a retirement account or pension that you can count on?

Fantasma

In 10 years I would have 27 years of service and could retire with a decent pension. I have pension thru my employer (school system) I would also be eligible for SS retirement. (assuming any of these things are solvent at that point)
I currently have no long term debt of any kind. I really can't envision even a 15 year mortgage at my age. I earn about $36.5K currently with $11k in savings. This would limit what I could purchase in my area as housing here is inflated, but they are falling as they are every else.

On a related subject, US housing prices have fallen more than they did during the great depression of the 1930's, since 2006 bubble burst. According to Case-Shiller they still have more to go as they head back to the 60 year baseline relationship between median wage and median house price.

I personally don't think you should just rely on your pension and social security.

That's what my parents are leaning on as well and they are the same age as you. I worry about that, because it will be me that has to fill in the "leaks" when they get old.

I would either devise an aggressive savings plan or start investing in some kind of moderate risk index fund of your choice.

Have you ever considered a mobile home? I think they are cheaper and you could pay that off before retirement.

Any change can happen between now and when you retire in regards to your pension, that's why I would go into (hoard money mode).

(Disclaimer I am a worry wart.)

I have considered a mobile home. My boss lives in one and likes it.
Yes I realize that they don't increase in value and yes I could likely pay it off before retirement.

Of course now we know that regular homes don't always increase in value as well, I don't think you should buy a house for an investment, but as a place to live for the long term.

You have cause to worry, I don't think the economy is going to get better anytime soon. The massive debt load at all levels is crashing, becoming unserviceable. The middle class/working class employment base has been devastated in the US. Several factors are coming together..."the perfect storm"

But I thanks another discussion and I don't want to "gloom" you out

An excellent resource for helping with this decision is the NYT Rent vs. Buy calculator:
http://www.nytimes.com/interactive/busi ... lator.html

Of course there are a lot of future uncertainties like rent increases/decreases, changes in interest rates (return on capital), inflation...

Maybe it's just because of low interest rates right now, but
Average house price = $250,000
Loan after 20% down payment = $200,000
Interest rate = 4.5%
Interest in the first year = a little under $9000
Property taxes at 1% = $2500
Total tax deductible home costs = $11,500
Standard deduction in 2011 for married filing jointly = $11,600

So the average, stereotypical case doesn't even beat the standard deduction.

Don't have to beat it. Many of us in high-tax states are itemizing anyway, based on taxes alone. The $11k is all benefit in that case. But I agree buying a home is often less of a good financial move than a lot of people think it is. Still, in many parts of the country the costs are comparable. In Vegas the cost of owning vs. renting has become ridiculously cheap, comparatively.

You buy a home if it makes sense for you. Financially the home (with mortgage, HOA, taxes, insurance, transaction costs for buying/selling, upkeep/maintenance/repairs/redecorating/upgrades) should ideally cost less per month than rent, right from the start (so you're not depending on price appreciation or anything out of your control). If it makes you happier and/or increases your quality of life, then that's another factor. The long-term commitment can be tough to swallow ... you're not as flexible to move if an opportunity presents itself, and any lingering problems with neighbors or the neighborhood or the home itself could not only haunt you while you live there, but also make a future sale more difficult or scare away tenants if you decide to rent it out someday.

Right now I live in a townhouse that I really love and I'm still so glad that I bought it. I did a lot of research, saved up, and stayed patient until the right property came along. I own a condo too (initially primary residence then converted to rental property) that I absolutely hate and wish I had never purchased. I did learn from that first mistake/experience: Condo complex was designed poorly with bad parking (and dispute on the assigned parking space for my unit); townhouse has attached garage, private driveway, and ample guest parking nearby with several spots directly in front of my door. Condo's fixed expenses were taking up way too much of my net income each month; townhouse is very reasonable with much lower monthly outlays (and also a smaller mortgage balance that will actually be paid off fairly soon). Also I kept more of an emotional distance/separation when negotiating on the townhouse ... even though I really wanted it, I had the upper hand if they were more motivated to sell it than I was to buy it.

I agree with Kombat, you are paying for the fees but in one sum. Also if having a house is not worth it then why do we have landlord’s in-order to rent? Owning a house can give you the ability to borrow more, have a home to raise a family and passing it down to your children. You are still paying fees when you rent but don’t get any of the benefits such as owning the property after a certain amount of time.