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Buying a house is a big decision. In order to provide sound advice, more information is needed.

Age?
Married/single?
Self employed/ employee?
Do you have 6 month cash reserve in case of job loss on top of a downpayment?
Current rent and living costs?
Future plans, relocation, wife, kids, retirement?

Generally, unless you have the need for a house due to family, securing a low rent apt. is far more finacially astute. Homes go up about 4-4.5% per year, add in taxes, insurance, upkeep and remodeling and most homes are very poor for investment. They are more of a "forced" savings plan. They can rapidly become no more than a money pit.

Your housing costs should not exceed 25% of your income. This is conservative, but will give you great peace of mind and allow you to live life, instead of being just a wage slave.

The Market will allow you to maximize your financial gains (8 to 10%) and with proper investment choices, lower your taxes and risk. Just depends on your future plans.

Most economists see another 12 to 18 months of lower home prices and tight credit (higher mortage interest).