Quick answer
Buying beats renting once the home’s price gain plus the rent you no longer pay outweigh the costs you can’t get back: mortgage interest, taxes, insurance, upkeep, buying and selling costs and the return your down payment could have earned. With national figures — a $360,000 home, $1,487 rent, the 7.24% average rate — buying breaks even in year 24.
Key facts
$360,600
US median home value
US Census Bureau, American Community Survey 2024 1-year · 2024 ACS 1-year
$1,487/mo
US median gross rent
US Census Bureau, American Community Survey 2024 1-year · 2024 ACS 1-year
Comparing like with like
Comparing rent with a mortgage payment misleads in both directions. Part of each mortgage payment is principal, which you get back when you sell; on the other hand, owners pay costs renters never see. The calculator compares unrecoverable costs — money that is gone either way:
| Owning | Renting |
|---|---|
| Mortgage interest (not principal) | Rent, rising each year |
| Property tax, insurance, maintenance, HOA dues, PMI | — |
| Buying costs up front and selling costs when you leave | — |
| Return your down payment and buying costs could have earned | — |
| minus the home’s price gain | — |
Each line on the chart is the running total of those costs. Where the owning line drops below the renting line, buying has become the cheaper choice.
The defaults and where they come from
- Home price and rent — median home value and median gross rent from the Census Bureau’s American Community Survey for the US or the state you pick.
- Home price growth — the latest 12-month change in the FHFA House Price Index (2.4%).
- Rent growth — the latest 12-month change in the BLS rent index (2.8%).
- Buying costs — the midpoint of the CFPB’s 2%–5% closing-cost range.
- Your assumptions — maintenance (1% of value a year), selling costs (6%) and the return on cash you don’t put into the house (4% a year) are starting points, not sourced figures. Change them to match your situation.
Twelve months of growth is a snapshot, not a forecast. Try lower and higher values to see how sensitive the answer is.
Worked example with national figures
$360,000 home, 10% down at 7.24%, rent $1,487 a month
| After 7 years | Amount |
|---|---|
| Net cost of owning | $224,401 |
| Rent paid | $135,904 |
| Owning, first month (payment, taxes, insurance, PMI, upkeep) | $3,084 |
| Cash to buy (down payment and buying costs) | $48,600 |
Break-even: year 24. With rent 50% higher, it moves to year 10; with no price growth at all, not within 30 years.
What moves the answer most
- How long you stay. Buying and selling costs are paid once, so every extra year spreads them thinner. Short stays almost always favour renting.
- The rent-to-price ratio. Where rents are high relative to prices, owning breaks even sooner.
- Price growth. Appreciation is the owner’s biggest potential gain — and the biggest uncertainty.
- The rate. Interest is the largest unrecoverable cost in the early years of a loan; see the payment calculator for the split.
Frequently asked questions
Is it cheaper to rent or buy a house?
It depends on how long you stay, local rents versus prices, the rate and price growth. With national figures and the calculator’s defaults, buying breaks even in year 24; enter your own numbers to see your break-even year.
How long do you need to stay for buying to make sense?
Long enough for price gains and saved rent to cover buying and selling costs. The calculator marks the year the owning line drops below the renting line.
Why doesn’t the calculator count my whole mortgage payment as a cost?
Principal repays your own loan and comes back to you as equity when you sell, so only the interest part is a cost. The opportunity cost of your down payment is counted separately.
What home price growth should I assume?
The default is the latest 12-month change in the FHFA House Price Index (2.4%). Local markets differ, so try a lower figure to stress-test the decision.
Where do the rent figures come from?
The Census Bureau’s American Community Survey median gross rent for the US or your state; rent growth comes from the Bureau of Labor Statistics rent index.
Sources
- CFPB — Typical closing costs, low end (share of purchase price); Typical closing costs, high end (share of purchase price) (Oct 28, 2026)
- US Census Bureau, American Community Survey 2024 1-year — Median value of owner-occupied homes (2024 ACS 1-year)
- Freddie Mac Primary Mortgage Market Survey — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- US Census Bureau, American Community Survey 2024 1-year — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- Freddie Mac Research — Average homeowners insurance premium per $1,000 of home value (2023 data)
- Freddie Mac My Home — Typical PMI cost, low end; Typical PMI cost, high end (Oct 28, 2026)
- US Census Bureau, American Community Survey 2024 1-year — Median gross rent (2024 ACS 1-year)
- Bureau of Labor Statistics — Rent of primary residence, 12-month change (CPI-U) (September 2026)
- FHFA House Price Index — US house prices, 12-month change (FHFA HPI) (August 2026)
- FHFA House Price Index
- BLS Consumer Price Index
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.