As far as I can see, the prices of homes in most areas, though dropping are still much too high. If you find you are saving money right now by evidence of a rising bank account, I would wait it out as long as you can stand it until prices drop to an acceptable ratio. When my wife and I were first married in 1989 we bought a house and paid the market value, but what turned out to be paying too much when we needed to move because the prices had dropped significantly in 1995. The ratio was between 16 and 17 using the method from the link. Of course it’s all relative when you are buying and selling because the house we are in now is worth twice what we paid for it at this point, while at the same time, the interest rates are low enough to have allowed us to go from a 30 year to a 15 year mortgage. The first house was also a two family which more or less paid the mortgage each month. (Another fine option, if you have the heart to be a landlord yourself!) We wound up keeping it and renting both apartments for a few years until prices came up enough to finally sell it. Don’t forget, the less you pay for a house the more potential equity you will have in the future which can come in handy if you need it.
I think the rent/ home price ratio method is a good indicator, because monthly rents in my area don’t seem to be much higher than they were 10-15 years ago, maybe a $100 more or so for a two bedroom apartment. House prices on the other hand have almost tripled in some neighborhoods making for a significantly larger mortgage payment with much less in return value. I’m roughly guessing that the ‘ratio’ for buying our second home in 1995 as opposed to renting an equal space was somewhere near 7 or 8.
To sum it up, renting at this time may be a better temporary financial decision than buying. It also frees you from the stress of having to sell a home at the same time as buying one when you find the one you want.