Rent or buy: When does homeownership actually make financial sense?

Homeownership builds equity and stability but high prices and borrowing costs limit affordability. Renting avoids upfront costs but high rents can hinder savings. Affordability should be based on what you can comfortably carry, not just lender approval. Test higher housing costs by saving the difference before buying. Consider all costs including down payment, taxes, fees, and maintain a financial cushion of at least three months' expenses.