The average time between recessions is allegedly four years, which means that the average time you will need to wait for a recession is four years (note that this is unintuitive: you'd expect your average wait to be 2 years, or perhaps 4 years minus the time since the last recession, but you'd be wrong: this is known as the waiting time paradox, or the bus wait paradox: https://en.wikipedia.org/wiki/Residual_time).
So the cost of waiting will average out to:
(4 years' rent) + (4 years of house price increases) - (amount house prices drop during the 4-yearly recessions).
There's a problem, there. House prices don't really drop during a common recession. Here's the graph of house prices for the last 40 years or so:
Notice anything? No big dips during recessions. There's a big bubble that grew and burst, but there are no big dips every four years or whatever. House prices continue to grow during a recession, if they're already growing.
So looking at the darker line (All US) on that graph, and assuming $1k/month rent:
- 4 years' rent: $48k
- 4 years of house price increases: $16k
- amount house prices drop every 4 years: $0
So, if you wait four years, odds are good you'll be $54k in the hole with absolutely nothing to show for it.
And notice that, even when house prices were plummeting as the housing bubble burst, they only dropped from a bit less than 380 to a bit over 300, a drop of less than 80k in five years. If you'd had a crystal ball to tell you to start this plan at the top of the peak, and wait five years until it told you the exact right moment where it bottomed out, you'd have saved yourself $80k on a house, and cost yourself $60k in rent, for a grand total saving of less than $20k.
If you got your start point even just one year early, you'd have made a loss.
The math might change for you a little if you're paying negligible rent, but in general, there's a very small stretch of time where this approach is worth it: the year leading up to a big housing bubble bursting.
Every other point on the graph, it's better to buy the house as early as you can, while it's still relatively cheap compared to its future value.
Now, there are no crystal balls. The day after you get your mortgage, everything could go bad and you could be left with an unsellable house, no job, and a massive mortgage. That's the risk you take on, getting a mortgage.
The current slope of the graph is a little steep, but if we're in a bubble at the moment, it's not a big one: any adjustment is likely to be relatively small.
So I'd argue: buy while you can.