I think live-in relationships are perfectly fine - it shouldn't be at the cost of someone's happiness though. What I mean is - if I want to move in with my boyfriend, that would be his choice and mine and that choice makes us both happy. It's unlikely that our parents are going to be happy about it. I would consider ourselves really lucky if they actually agree.
But, I would consider their happiness and stand in the society about moving in with mine or his family. That doesn't necessarily mean that he or I care about what the society thinks. However, if his folks or mine care about that and do not want to be subject to what they consider as embarrassment, I would probably make sure we get an apartment in a locality where people think like us and then move in there.
Living in before marriage in parents' house should be done only if they think just the way we do. If not, we should respect their thoughts and live in another place.