Renter Anthony Ingoglia wasn't even thinking about home ownership eight months ago. The 31-year-old bachelor had always assumed he would buy after he married and started a family.

But now the Rancho Santa Margarita, Calif., apartment dweller has a new plan, and lately he's been out submitting offers on houses.Like a lot of renters, Ingoglia jumped into the home-shopping game after seeing the recent drop in mortgage interest rates and spike in home prices.

Those barometers give new urgency to the age-old question: to buy or to rent?

"I don't want this market to get away from me," said Ingoglia, who figures the sort of four-bedroom house he wants could appreciate nearly 20 percent over the next few years. "The longer interest rates stay low, the more buyers are going to be coming out of the woodwork. I've already been outbid."

Ingoglia, who works in mortgage banking, toyed with various "buy vs. rent" scenarios before making his first offer. Ul-timately, he decided the combination of factors was too strong: low interest rates, his sense that local home values will appreciate substantially in the next few years and the healthy tax write-off a mortgage can provide.

With a renter in one room, he figures he'll only pay about $400 more each month for a 2,500-square-foot home than he does today for his 800-square-foot, $900-a-month apartment.

If he wins his bet on price appreciation - which is based on rosy economic and job-market forecasts - Ingoglia's $20,000 down payment could bring him $60,000 in increased home value within a few years.

Ingoglia is bullish on real estate. And it would be difficult these days to find a real estate expert who would disagree with his conclusion that the market is in the nascent stages of a significant run-up. Nevertheless, experts also caution potential homebuyers to be financially and psychologically prepared. Buyers need to understand what has become painfully clear to thousands of California homeowners in the past decade: Values move in both directions.

By no means is a house always a good investment. Consider a young couple who might have stretched to buy a $160,000 condominium back in 1992. Today that home, if in Orange County, Calif., could easily be worth $130,000. Had they instead sunk a down payment, say $10,000, into the stock market, they might have doubled their money in those six years.

Even some real-estate agents warn how quickly hot real estate markets can cool.

"If Saddam (Hussein) starts blowing up oil wells again, that could spook the general economy and cause a major turn of events, either temporary or for the long term," said Kevin Hill, manager of the Laguna Hills, Calif., office of Barker Real Estate.

That said, scores of renters shopping for a house believe now is as good as any time to take the plunge. Some are being nudged by rising rents.

Many Southern California houses can still be purchased for less than what they sold for nearly a decade ago. And today's interest rates are near historic lows - the Southern California average for a conforming, 30-year fixed loan with two points was 6.73 percent in mid-February. A year ago it was closer to 7.5 percent.

The monthly loan payment in Orange County for a median-priced, single-family home peaked at $1,601 in spring 1989. In January the payment was $1,127, reports DataQuick Information Systems, a real estate analysis firm.

Condominiums - where values often are the first to fall and the last to rise in a market cycle - remain particularly affordable. In January the median condominium sale price in Orange County was $133,000; for a detached home it was $220,000.

A new federal tax law also boosts the argument for buying. It allows homeowners to avoid paying taxes on up to $250,000 in home-sale profits ($500,000 for a married couple filing jointly).

Here are a few of the financial arguments employed in the rent vs. buy debate.

Reasons to buy:

Deduction of mortgage interest and property taxes from otherwise taxable income.

Do the math yourself, though. Some real estate agents tout tax advantages without taking the time to explain them in detail to buyers, whose situations vary dramatically based on income, tax bracket and other factors.

"I've had clients come in sold on that (a huge tax break) by Realtors," said Kim Loewer, a tax specialist at Loewer & Associates in Laguna Niguel, Calif. "They expect me to wave a magic wand over their tax returns and get them this big refund. Sometimes it happens, sometimes it doesn't."

Paying a mortgage can be a form of forced savings if you build equity in a home.

If home values rise, ownership offers tremendous leverage. For instance, a 5 percent down payment - say $10,000 - could produce a return that's equal to many times that amount in home-value appreciation. Then again, if values plummet . . .

Reasons to rent:

Renting can be cheaper. With a down payment, maintenance costs and mortgage payments, homeownership can take a huge bite out of your monthly budget. Buying can cramp your lifestyle if you can't afford to own where you want to be - like near the beach.

You can invest the money you save by renting in stocks, bonds and other investments that might outperform real estate appreciation. But be honest in evaluating this potential advantage: Do you have the discipline to invest that money rather than spend it on vacations, toys and dinners out?

"Only about 1 percent of the population will truly, faithfully take that money (the difference between rent and a mortgage payment) and invest it," said Linda Barlow, a certified financial planner.

Marty and Mindy Berry of Newport Beach, Calif., say they have the discipline. They have owned several large homes over the past few decades and have no desire to own another. They rent a small, two-bedroom apartment at an upscale seaside complex, and they're investing the money they save by not paying on a large mortgage.