As absolutely terrified as I am, currently staring into the dark abyss of despair...
I.... agree with billi.....
While I cannot speak of the housing market in the States, and I realize that it seems to be MUCH more unstable than Canada... A house is almost ALWAYS, 95% of the time, an investment. With nothing but normal maintenance, worst-case scenario in the MAJORITY of cases, you will be able to sell the house for roughly what you paid for it. Even super-worse case, maybe the neighbourhood value takes a shit because of some abandoned homes or something, maybe the house loses $5k or $10k. If you've been living there for 5-6 years and have paid down a significant amount of the mortgage, you're still coming out of the place with cash in pocket. HUGE cash, relatively. Now you can use that on a downpayment for another house, or to pay off other debt, or whatever.
It's not that renting a place is "throwing away" money. You're literally paying for room and board. It's not throwing it away. But owning a home gives you an additional investment, it gives you liquidity to work with. As mentioned, it gives you, the normal schmuck, the ability to work with a large sum of money to invest in your future.
Real life example is Tara and I, we're finally thinking of moving just outside the city to a nice "hobby farm" sort of property. We bought our house for $148,500 eight years ago. We're at like $130something right now. In a couple more years, $120k or so. We plan to put the house on the market for, let's say, $165,000. Maybe we're deluded, we end up settling for $150k, almost what we paid for it eight years ago. That STILL gives us something like $30,000 to play with! That'll pay off a credit card, buy a new car, and have a healthy downpayment for a new house, maybe. Or a huge downpayment on a house. Or whatever. Is there a risk? Sure a tiny bit. Maybe just MAYBE the housing market will crash in a year or two and suddenly we can't sell the house for shit, or only sell it for an abysmal sum. But it's pretty unlikely.
And... once again.... *shudder*... I agree... With billi.... .... That in an absolute doomsday scenario, you lose your job and have to walk away from the house. You're bankrupt. Shit happens? Credit score sucks. Life goes on.
Real life example: buddy of mine is in that exact situation. Got married, used money left in his dad's will to put a downpayment on a really nice $250k-ish house in suburbia. Ended up pissing away all his money into gambling and various other stupid ventures, then to top it off got divorced, and started having health problems that made his work hours spotty. Life crumbles, he has to walk away from the house and declare bankruptcy. Now here we are like 5-6 years later, he's re-married and has two kids, loving his life, and renting a shitty little condo unit. The place sucks, but are you gonna do? Is that risk REALLY all that huge a risk, that you have to go back to renting an apartment? Seems reasonable to me.
Fucking billi.
EDIT: mind you, this is all on the assumption you can afford a mortgage and/or downpayment in the first place. And are smart enough to not buy a shitheap of a house unless you're willing to do the work. The "renting is cheaper than buying where I live" argument is only useful if you're on such a tight budget that "I can only pay $600/month instead of $800/month" or whatever. Well then obviously, you'll rent. But to be able to AFFORD a mortgage but say "fuck it, I'm going to rent because it saves me $200 a month" is ridiculous.