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Rules of thumb for house buying is keeping your mortgage,upkeep expenses and property taxes below what you would normally pay to rent. Now with that said Silverbullet is right. In a lot of situations these days renting is the better way to. You think you are doing something with the mortgage money because it's going there and not being squandered on rent. Like he said there are expenses some of that money is going to you never get back. Cost of living period. Ya you can try and look at a owning a House as an investment but if you do you are slipping into the same game that has a lot of people underwater now and in the last few years.
Houses are not meant to be investment vehicle. They are meant to be security so you raise a family in a nice neighborhood to send your kids to school. There is a reason a 30 year mortgage was the norm. People did not buy houses to trade up equity. Unless you are professional contractor or real estate person who specializes in buying houses fixing them and flipping them it's pure dangerous for the average consumer or home owner/ would be home owner.
There are exceptions and I know a few have spoken up here. It's just like buying and selling cars. Some can do it most cannot and fact is most should not.
People need to stop looking at houses like piggy banks. It's a roof over your head and a shelter from the storm.
Oh and there are other things to invest that yield much safer profits over the long term. Housing in this market where I live has indeed gone into another bubble. It is not as bad as the previous one but it's a bubble none the less. It will pop. If you are speculating onit you better be pretty smart to know when to pull out before it does.
Now if you went into thinking this is were I am going to live for the next 10-15'years or more and you meet the previous criteria I stated then it's not a bad thing. It may not be as great as you think though either
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