Estimated reading time: 9 minutes
Should you rent or should you buy? The truth is, there’s no one-size-fits-all answer. It all comes down to your finances, lifestyle, and future plans.
Not long ago, buying a home was the clear winner. But with mortgage rates sitting high, even confident buyers are rethinking the math.
Tenters have more wiggle room—they can invest their savings elsewhere and keep their options open. Still, with home prices showing no signs of dropping, buyers who act now could lock in a solid deal before houses get even more expensive.
Renting brings flexibility and fewer upfront costs. Buying brings long-term payoff, from equity growth to tax perks and a sense of stability you just can’t rent.
So, which is better? The scale keeps tipping back and forth until you decide what fits your life best. To make that call easier, I crunched the numbers, spoke with a few smart people, and uncovered insights that’ll help you navigate the rent-vs-buy puzzle with confidence.
Keep reading; your answer might be closer than you think 😉
The Buy vs. Rent Dilemma
Ever since I was little, my parents instilled in me the importance of having my own space.
“When you have your own land and house, you are the one who makes the decisions,” my father liked to say.
But in today’s housing market, I prefer to rent. And I’m not the only one. With mortgage rates hovering around 6% (they were 7% in the summer!) and the median prices for existing houses at around $415,000, you need to make six figures to even dream about buying a home.
Millennials and Gen Z are struggling to afford their first homes, and experts don’t see improvement any time soon. According to Bankrate’s Rent vs. Buy Study, across the US, rent is cheaper than the average mortgage payment.
Still, this doesn’t mean that renters are doing any better. The current inflation rate also drove rental costs through the roof, which led to annual or biennial rent increases. This means housing costs are increasing on this side of the aisle as well, with no long-term cost ceiling in sight.
There’s also a lot of anxiety around the job market’s cooling period, which has prompted many wannabe buyers to press pause on their plans. After all, whether you rent or pay a mortgage, you have to make sure you can afford it, right?
No matter how you take it, neither option seems to be “the best.”
So, what should we do? Live under bridges? Go camping? Try couchsurfing with our friends who were lucky enough to buy before all this madness?
Let’s take each case separately and analyze the pros and cons.
Buying: The Pros and Cons
As I’ve already mentioned, today’s market is characterized by high prices and high mortgage rates. This makes the cost of entry substantial.
However, the long-term benefits of homeownership still apply:
Long-Term Wealth Building
Homeownership is the primary driver of wealth for most American families. The combination of paying down the principal (building equity) and historical asset appreciation creates significant net worth over time.
But this “over time” may be longer than it used to be. According to a Business Insider interview with Zillow’s Amanda Pendleton, at current rates, you’d have to stay in your house for 7 to 9 years to make owning better than renting. Things are even more dire in expensive markets like New York City or San Francisco, where it takes 15 to 20 years for buying to be better than renting.
Stable Monthly Principal and Interest
A fixed-rate mortgage locks in your largest housing expense for up to 30 years. This offers financial predictability and hedges against the certainty of rising rents.
But rising inflation directly increases ancillary costs of homeownership, such as property taxes, homeowners’ insurance premiums, and maintenance/repair costs.
Future Refinance Opportunity
You can secure the property at today’s price, which is the primary driver of future cost. If mortgage rates decrease in the coming years, you can refinance to a lower payment.
Tax Advantages
You may deduct mortgage interest and property taxes (subject to current tax law limitations), which lowers your taxable income.
Now, let’s move on to the responsibilities and consequences of homeownership (aka, the cons):
High Upfront Costs
You need a down payment (often 5% to 20%) and must support closing costs (typically 2% to 5% of the loan amount).
If we use the national average ($415,000), your down payment can range from $21,000 to $83,000, while closing costs can range from $6,000 to $19,000. And these are only the initial costs.
It takes some real financial planning to make things work in this market!
High Maintenance Costs
After you’ve shelled out a mountain of money just to be called a homeowner, you have to have another one set aside for maintenance and emergency repairs.
Yes, when the water heater breaks at 11 PM, it’s your job to get it fixed. The cost of an emergency repair is between $500 and $1000, but if the unit has to be replaced, the costs range between $1,600 and $5,500, depending on the type of heater and installation specifics
Pro tip: You can learn how to handle water heater problems before they become a huge problem. Just do a bit of research on how to properly maintain your unit, and make sure you’re up to date with standard inspections.
You also need to budget for preventive maintenance, which, depending on location, can be quite burdensome.
For instance, proper air conditioner maintenance in Denver requires winterization before freezing temperatures arrive. But if you bought a house in Florida, this won’t be a problem. Instead, you have to constantly change the filters and find ways to handle the humidity.
High Cost of Ownership
Once you’re an owner, you have other costs besides the mortgage—property taxes, insurance, utilities, HOA fees, etc. Add to this any renovations and furniture upgrades, and you might find yourself in the red.
Some homeowners even take on high-interest credit card debt to cover these expenses. If you’re in a similar situation and debt starts piling up, a debt relief program can help you regain control before the situation becomes unmanageable.
Lack of Flexibility
Buying is a long-term commitment. The transaction costs and time required to sell mean that if you need to move within 5 to 7 years, you may not have enough appreciation to offset the expenses, potentially losing money.
Renting: The Pros and Cons
Renting can preserve liquidity, provide flexibility, and offer a better return if you invest the difference. It’s also a good opportunity if you haven’t yet decided where you want to settle down long-term.
Of course, this means you’ll be at the mercy of your landlord, with a rent increase always looming in the shadows.
But let’s not jump the gun and see why, in today’s market, some people think renting is the better option.
Lower Entry and Monthly Cost
The average national monthly rent ($2,000) is cheaper than the average monthly mortgage payment for a comparable home in most major US metro areas. As a renter, you don’t have to pay a large down payment, property taxes, or incur maintenance expenses.
You do put down a deposit, and there are hidden costs in rental agreements, but it doesn’t compare to the costs of buying and owning a house.
Maximum Flexibility and Mobility
One of the biggest perks of renting? Freedom. When your lease ends, you can pack up and move on without the sky-high fees, endless paperwork, or market guesswork that come with selling a home. Sure, moving isn’t anyone’s favorite weekend activity, but it’s a breeze compared to the costs and stress of listing and selling property.
Plus, your money isn’t tied up in a long-term asset. By investing the money saved on the down payment, closing costs, and the difference between a high mortgage payment and a lower rent payment, you can potentially achieve a higher net worth than a homeowner. But the result depends on the performance of the stock market versus the local housing market.
No Maintenance or Repair Costs
All responsibility for property taxes, homeowners’ insurance, and costly repairs (e.g., roof, HVAC, appliances) falls entirely on the landlord. As long as you respect your end of the deal, the landlord must pay for the repairs.
Todd Benadum, VP of Sales & Marketing at Elsco Transformers, made it clear that these are not easy-to-carry costs for homeowners.
“Replacing a major appliance or fixing electrical issues can run into thousands of dollars (depending on the issue at hand). Those expenses often catch new homeowners off guard and can quickly eat into savings,” he shared.
It does look like renting is winning this one, doesn’t it? But there’s also a dark side that you must consider:
No Equity
Rent payments do not contribute to building personal wealth or equity. Every dollar spent on rent goes toward paying the landlord’s mortgage and expenses, not toward your own long-term financial security.
Lack of Control
When you rent, your home’s future isn’t entirely in your hands. The landlord can choose not to renew your lease or decide to sell the property—and suddenly, you’re back on the housing hunt. This can get exhausting (and expensive) in a crowded city, where every rental has several people fighting over it.
For families, that uncertainty can ripple through daily life. Changing addresses might mean new schools, new commutes, and starting over in a new community just when you were beginning to feel at home.
Limited Personalization
“When you rent, you can’t truly make that place your own. Even painting the walls or installing better lighting needs the landlord’s approval. And forget about building the home gym you’ve always wanted; I learned that the hard way. For someone who values freedom and personal space, that lack of control was incredibly frustrating.” — Wang Dong, Founder at Vanswe Fitness.
What Wang Dong shared is true no matter where you rent. While unfurnished apartments exist, hauling your furniture and appliances every time you move is no small feat. And finding a perfectly furnished place? That’s like hunting for a needle in a haystack.
Rising Housing Costs
Your rent will increase annually or biannually (depending on the rental agreement). However, the landlord can’t exceed the average annual rent increase, which is currently slowing to approximately 3%–5%.
How much your rent will increase varies by location, state laws, and whether the tenant is new or renewing a lease. But we have a neat rent increase calculator you can use to figure things out before you find the dreaded notification in the mail.
The Verdict? It Depends
Whether you decide to buy or rent depends entirely on your current situation and future plans. For instance, if you plan to live in an area for more than 5 years, want full control over your property, and have the money for a down payment, buying looks like the best option.
On the other hand, if you don’t want to stay put for more than 2-3 years, and don’t mind a space you don’t have full control over, renting looks better for you.
If you’re still undecided, use our buy vs. rent calculator to understand the costs for each option. Overall, it’s all up to how much money you have and what you want to do with it.
