Buying a house is important for reasons that are not financial at all. It simply feels good to know that you have basic shelter with no overheads to pay.

Also, basic things like a house are protected in many circumstances under bankruptcy provisions. This means that owning at least a modest place of your own can give you a platform of security for going about your life that you cannot get any other way.

It may not make a lot of sense on an accountant's balance sheet, but the psychological benefits of it are wonderful. Buying a modest house would be one of the first things I would do in this situation. Especially in a buyer's market like there is now.