I'd still buy the house. A 30 year mortgage on that $200k house @ 6% is going to cost me $1,199 a month or $431,676 over the life of that mortgage. If the hous

I'd still buy the house. A 30 year mortgage on that $200k house @ 6% is going to cost me $1,199 a month or $431,676 over the life of that mortgage. If the house devalues to $180k my actual out of pocket money spent is $251,676. If I do a 15 year mortgage under the same conditions I spend $1,688 a month, but my total cash out is down to $303,788 over the life of the loan or $123,788 out of pocket (again assuming the house is worth $180k in the end). Now lets pretend like I can find rent at $1k a month for something similar. That's unlikely to be true over that period (rents tend to rise at least with inflation), but lets just go with it. Over a 30 year period I will have spent $360,000. That's $108,324 more than my 30 year mortgage and a whopping $236,212 over my 15 year mortgage. That's not even counting the interest deductions I get to take on the mortgage interest I'm paying. Now I know I'm discounting a bunch of things like property taxes and maintenance on the house (in return I'm giving unrealistically low rent). Those costs for your average house aren't going to be anywhere near the difference in rent... If you're relatively stable in your life, buying almost always makes more sense than renting because at the end of the day you have to pay someone to live somewhere and some of that might as well end up in your bank account.