Steven, you are not considering "carry costs". Even if your payments have stopped, because you've paid off your mortgage, you're forgoing positive cash you could be receiving from stocks or bonds. But, as I said, you've got to have shelter.

If you buy a home for @250,000 with a 5% down-payment you are only investing $12,500 of your own money and borrowing the remainder. If the house appreciates in value by 2% it has gone up in value by $5,000. that is a 40% return on your $12,500 investment. Of course if the value of the house goes down 2% you lose 40% of your investment.

You can not get that kind of leverage in the stock market or any other investments. This is about the only way the average person can play the leverage game the way the more affluent do.

Owning a home also establishes credit at a higher level and equity can be used for a number of purposes.

Buying makes sense when the buyer uses common sense.

Ibbotson and Associates peg the real return on housing in the U.S. over the past 100 years at 0%. That shouldn't surprise anyone because shelter is required consumption. Yes, by all means buy a house if you can afford it, but it's in the insurance/bottled water/shotgun part of your portfolio, not the stocks and bonds part.

Another way to look at it is unless you are getting a sweetheart deal (aka your father in law owns the property), whomever is renting you the property is having to cover most of those same fees discussed. Plus, as a renter, they get the cost of repairs. They can save on repairs (e.g. not doing them or taking a long time), but do you want to live there then?

Buying a house knowing you will move in a few years is a questionable thing. Buying if you don't think you can afford the house is also questionable. But I would tend to buy a smaller house than rent myself.