The downsides to renting:
1) the longer you wait to sell, the lower your house price is going to be. You may have to wait 15 years or more to get back to today’s prices. Your home value will take a big dip after the state regulated lenders have to follow the new lending guidelines and another big dip once the $1 trillion of ARMs reset next year; in a few years, a 2006 sale will seem almost like the top of the market.
2) you can’t release your equity if you rent; selling gives you equity for your downpayment on the new digs
3) if you sell after 2 years of renting, you will owe capital gains taxes on the profits, and if you sell within 2 years of renting you are sure to take a big loss compared to selling today