I'm 28 and he's 31. We are both very much in love, yet we have had a rough time for several months. We both agree that we may have rushed into moving in together as we had only dated a few months prior to that move. We have now been together over a year. Our lease is up in a couple of months and he said that because of the problems we have had in getting along, that he needs some time to think about whether we should even continue to live together. I made it clear to him what I think about that: Yes, we might have made a mistake in moving in together so quickly, but now that we have lived together, there is no going backwards so to speak. I feel that if we do that breaking up sooner or later is inevitable. Either way he wants to continue to work on our relationship, but I feel that because we have lived together for almost a year that we'll stand a better chance of things working out if we continue our path living together than living apart at this point.

Another important fact about this situation is that his younger sister has been living with us from the beginning, but when the lease is up if he and I are still living together she wants her own apartment. He doesn't like to hear this because he thinks this concept is just ridiculous, but I feel that when it's just the two of us we will be able to just be a couple at home without having to worry about another grown adult's feelings, privacy, comfort level, needs, etc. 24/7.

I'm giving him the time he asked for to think things over by not hassling him about whether he's reached a decision and I know he won't keep me waiting long, but my anxiety level is through the roof. I've had tons of nightmares about him and end up getting terrible, unrested sleep each night and it's starting to affect my work. I think that if he decides he doesn't want to live together anymore, I should just say we need to break up because I'm going to end up really resenting him and not be able to move forward. I don't know what I should be thinking, I don't know how to get my anxiety down (I can't distract myself with friends, hobbies, and work 'all' the time), and I don't know how to not walk around the house moping about how worried sick I am about this, especially when he's home.

I'd like some insight on this.

I don't agree with your premises that you can't go backwards and that breaking up is inevitable if you move to separate places. But I do understand how you feel. And I do understand the wish to live without a third person. I don't think there's a right or wrong here, just differences.
I personally would go for the separate places, even if what you predict comes true. But I see no reason to assume it will come true. Being 'in love' can mean that you don't tell each other what bothers you about little stupid things around the house! Getting past the romance stage of love means you can. You get more practical. You sit down with paper and pen and write down what you want and he does the same, and you discuss it, and make trades and concessions and compromises. One of you is clean and neat, one messy. One likes the TV on while reading, one hates it. One leaves lights on, one likes to conserve. Make lists!
The sister issue is going to be a delicate discussion. I don't see her as a hindrance and she may be his way of saying 'don't rush me into marriage and commitment' and 'I care about family more than anything (a good trait to have, because it means loyalty to you someday). But I totally understand that it probably has a fifth wheel feeling. Only you can decide if you are willing to accept it for the sake of keeping him.
Good luck.

Its never easy with the uncertainty of what happens next, and waiting for someone else to make that decision for you would drive me nuts. I don't know what the timetable is but I think that a plan A, and a plan B, hoping for the best, and planning for the worst would be MY course of action after a year of being with some one that's reluctant about what they want.

Matter of fact, he better be careful because at some point you stop waiting on them (at least I always have), and make the choice that works for you, and your interest, and they can choose when they are ready. To calm your nerves, take a break, visit family, and think without his presence, or influence.

I would hate to be waiting for some one to s**t, or get off the pot!