The problem is that many people view home ownership as a cultural / political statement beyond all else. They desperately need to stop being a rentoid and become a landchad. The reality is that renting is often a better financial decision than buying, especially short term. Plus, in this economy there is no guarantee that you're going to be employed in one city your whole life.

The short answer is probably everything in moderation if you're reasonably young. Maybe don't put every penny you can get your hands on into a down payment on a house, especially if you're also a bit uncertain about future income streams and life situation. But maybe you also don't really need a year or two comfortable emergency fund.

At some point, it probably makes sense to buy a place if you can if only for the stability as you get older.