I have decided against homeownership for several reasons:
1. I'm permanently nomadic. I haven't lived at the same address for more than two years since I left high school. It doesn't make sense for me to buy a home if I'm going to move every year or two.
2. Homes can be very illiquid assets, and if you need to sell your home (say, because of a new job in a different city) at a time when the housing market is in the doldrums, you are hosed.
3. I am anti-leverage. I just don't like the idea of having small percentage drops in home values resulting in huge losses. I'm not necessarily against paying for a home in cash and owning it outright, but I do not want a mortgage.
4. My circumstances constantly change, and when they do, I can adjust my housing needs. If I lose my job, I can easily move someplace cheaper without having to worry about not being able to pay the mortgage. If I end up needing more space because of an addition to the family, that's not a problem either. When we last tried looking at homes to buy five years ago, every home that we looked at seemed to be for sale because the owners had another child, and their old home was now too small for them. Given the high transaction costs of buying and selling a home, it seemed strange that they would buy a home only to have to move a couple years later when their circumstances changed. I much prefer the flexibility of renting.
5. Where I live, even if you owned a home outright, you would still have to pay somewhere in the neighborhood of $600-$1,000 per month in property taxes and HOA fees. Yes, property taxes are tax-deductible, but that only partially offsets those costs. And yes, rent prices take these costs into account, but you would be surprised at how little money is actually going to the owner once their costs are taken into account.
6. This is going to sound strange, but in my mind, interest rates are too low to get a mortgage right now. The only reason home prices have stabilized is because interest rates have been kept artificially low, which has not allowed home prices to fall to their true values. The new homebuyer credit has also led to an artificial inflation in home prices. At this point, home prices are still too high, and when interest rates start to rise, home prices should fall.
I'm not saying that no one should own a home. I'm just saying that, in my situation, a home is not the right investment. I'm more interested in making sure my retirement is well-funded. I've basically socked away the statutory maximum into my 401(k) for years now, and I expect to continue to do so. If I want to buy a home once I retire, that shouldn't be a problem.