The question sounds similar to a poular Clash song, "Should I Stay or Should I Go?" It is a big decision and a question many people ask. When does it make more sense to buy a home rather than rent? It is nice not having the upkeep and maintenance issues, but it is also nice having appreciation, a huge tax deduction, and the ability to do what you want with where you live. And it is a nice feeling that your monthly housing payment is going toward something that you own rather than just giving it away.
Historically, people look at what are called "price-to-rent ratios," which compare the average sale price of homes in an area to average annual rents there. But these ratios compare very different types of housing, ignore transaction costs and the benefits of buying, and are not particularly helpful.
The main thing is to decide how long you will stay in the area. Obviously, you should rent if you are only living somewhere for one year or less. The book Zillow Talk; the New Rules of Real Estate, by Spencer Rascoff and Stan Humphries, talks about "the breakeven horizon," which pinpoints the number of years it would take to make buying econimically preferable to renting the same home. It varies from area to area, and from time to time. The book gives the national average in Metro Atlanta for the first quarter of 2014 as 1.4 years. Commpare that to living in Washington DC where the breakeven horizon is 4.2 years, and Greenville, where it is 8.4 years. A big part of this equation is the extraordinarily low mortgage rates, and the lower prices and current home appreciation factor, which in Metro Atlanta is higher and faster than it has been in a long time.
The other factors to look at are if you anticipate a job change, or when you anticipate a change in family demographics. If you expect to be downsized or transferred in your employment, you may need your situation to be flexible enough to move to another area for locating suitable employment. And while you can always look at buying a larger home to handle future children, if you are in a situation where you have grown children getting ready to leave the home you may want to wait to buy so you do not have too large a home.
Sometimes renting has a poor reputation, and owning a home is the major factor in a credit score. There are times when renting makes sense - - when you are not going to live in an area for long, when you are unsure of your job, and when your family situation is going to change. In most cases in our current Metro Atlanta market and economic situation, it makes more sense than ever to buy a home.