Reply #39: This article is spot on

[Warpy]

Home ownership doesn't make sense in a lot of instances, which is why I laughed the condo conversion people out of my apartment in Boston when they tried to sell the deal to me.

However, if you're in a market that didn't see a price bubble in housing but is seeing fast rising rent, then ownership can be a good hedge against rising rent. Even if you lose that down payment and get into a negative equity situation for a while, if that monthly PITI is less than rent, you're way ahead of the game. Remember, home mortgage interest rates are still low enough to make it a good deal and that you will eventually begin to build equity. The tax deduction is 30 cents on the dollar you pay, but that 30 cents is better than bupkus.

That's why I bought 11 years ago, as a hedge against rents. I was right, and my mortgage payment was less than rent in less than two years.

The best advice is to know your market. If you're in most of California or in a few western cities or Florida, RENT.