I always heard it is better to be a homeowner, but what if you want to live in an area you can't afford to buy in?

My husband and I pay $3500 a month in rent to live in a great area.
We have $120,000 saved up for a down payment. Unfortunately, studios go for $715K plus HOA/maintenance fees in the region of the city we are in love with. So those numbers don't work for us. We don't want a studio, want at least a 1BR preferably 2.

However, we could easily move to the suburbs and buy a piece of land with a nice little 3 BR house on it with our 120K down payment and be paying less than $3500/mo in mortgage. But we wouldn't be living exactly where we want to live with our awesome pedestrian commutes to work.

Just wondering if it is foolish to pay rent and live where we want when we can afford to buy (albeit somewhere else.)

When the little ones come along, we will likely migrate to the suburbs as everyone else does. But many of my friends and siblings chose to buy sooner rather than later I guess for good financial sense. Of course, they're not spending any more than we can on down payment / mortgage.

When is the best time to buy: when you can or when you want to move to a town you can afford?

Before getting married, I couldn't afford to buy my own place. So it seems weird to me to be able to buy, but still be a renter.