My home church met in a house for months because they lacked any other facilities. The only downside is it doesn't allow much room for growth. But since then they've been able to rent another facility.
I don't see anything wrong with it, I liked the coziness and family orientedness of it. You actually felt like these were your real brothers and sisters in Christ worshiping together in the living room =)
I think smaller congregrations where there are just a handful of people may do well meeting in a home if they don't have the funds for an actual building, but like I said it doesn't allow much room for a congregation to grow if they are set on staying in a house.
