Despite a few bright spots, news from the housing market is mostly grim. Nationally, average home prices have fallen more than 19% over the past 12 months, according to the S&P/Case-Shiller national home-price index.

If you have a cast-iron stomach, this might be a good time to bargain hunt. But many people may be better off renting.

Over the long haul, owning a home rather than renting generally pays off. Over the years, a fixed monthly mortgage payment may take a smaller and smaller portion of your growing income, leaving more money to invest for retirement, college or other long-term goals.

At some point, most homeowners own their homes free and clear, while renters are never off the hook and generally pay more each year. The home is a valuable asset to the homeowner, but worth nothing to the renter.

Over shorter periods, however, renting can be the better option. It doesn't involve the huge up-front costs of home buying, the ongoing maintenance expense and hassles, or the steep sales commission when you're ready to move.

Most important, you are free to move on short notice. Today, many homeowners who have lost their jobs are unable to relocate for new ones because they are trapped by their homes, unable to sell for as much as they owe on their mortgages.

The Rent vs. Buy calculator can help make sense of the numbers, but additional factors should be considered.

If you bought a $300,000 home with $60,000 down and a 5% fixed-rate mortgage, you could "break even" in 2.5 years, assuming you could rent a comparable place for $1,600 a month. (Other factors have been left at the calculator's default values.)

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