By Meraj Uddin Provat · Last reviewed September 9, 2026 · Editorial Standards
Renting is cheaper than buying almost everywhere in America right now — and that fact tells you almost nothing about which one is the better decision. The question that matters is how many years you need to stay before ownership pulls ahead. At today’s rates that number is a lot further out than the familiar “five year rule” suggests, and it swings wildly on one input most people guess at.
The 2026 starting numbers
Every figure below comes from a primary source, current as of early September 2026:
| Input | Value | Source |
|---|---|---|
| Median existing-home price | $434,100 | National Association of REALTORS, July 2026 |
| 30-year fixed mortgage rate | 6.71% | Freddie Mac PMMS, September 3, 2026 |
| Median asking rent (all homes) | $1,962 | Zillow Observed Rent Index, July 2026 |
Those three numbers set up the whole problem. A median home bought with 10% down means a $390,690 loan and a principal-and-interest payment of $2,524 a month. Add property tax, insurance, maintenance and PMI and the all-in carrying cost is about $3,627 a month. The national median asking rent is $1,962.
So buying costs roughly $1,665 more per month than renting. Ownership has to make that back through equity and appreciation before it wins. That takes years.
The honest comparison most articles get wrong
You cannot compare a mortgage payment to a rent payment and call it analysis. The correct comparison holds the monthly budget equal and asks who ends up wealthier:
The buyer puts $52,092 into a down payment and closing costs. The renter invests that same $52,092. Each month, whoever pays less for housing invests the difference at 6%. At any point in the future, the buyer’s net worth is the home’s value minus 7% selling costs minus the remaining loan balance. The renter’s net worth is the portfolio. The year those two lines cross is the break-even.
How long buying takes to win
Because the national median rent ($1,962) reflects mostly apartments, it is not a fair stand-in for the rent on a home comparable to a $434,100 house. Rather than invent a single “correct” rent, here is the break-even year across a realistic range:
| Comparable monthly rent | Break-even year | Buyer’s advantage at year 10 |
|---|---|---|
| $1,800 | Never within 20 years | −$140,259 |
| $2,200 | Never within 20 years | −$65,195 |
| $2,600 | Year 10 | +$9,869 |
| $3,000 | Year 5 | +$84,933 |
| $3,400 | Year 4 | +$159,997 |
| $3,800 | Year 3 | +$235,061 |
This is the headline finding: the rent you avoid paying decides the entire question. Between a $2,200 rental and a $3,000 rental — an $800 monthly difference — buying goes from never breaking even to breaking even in five years.
Year by year, at $2,600 rent
| Year | Buyer net worth | Renter net worth | Gap |
|---|---|---|---|
| 1 | $29,330 | $67,539 | −$38,209 |
| 3 | $63,936 | $98,336 | −$34,399 |
| 5 | $101,414 | $128,783 | −$27,369 |
| 7 | $142,048 | $158,578 | −$16,530 |
| 9 | $186,154 | $187,361 | −$1,207 |
| 10 | $209,657 | $199,788 | +$9,869 |
| 12 | $262,931 | $225,193 | +$37,738 |
Notice how flat the gap stays through year 5. The buyer is not losing ground — they are slowly digging out of $52,092 in upfront cash and 7% in future selling costs. That hole is why short ownership is expensive regardless of what the market does.
What actually moves the answer
Holding rent at $2,600 and changing one assumption at a time:
| Change | Break-even year |
|---|---|
| Baseline (3% appreciation, 6% returns, 6.71% rate) | Year 10 |
| Appreciation slows to 2% | Year 15 |
| Appreciation runs 4% | Year 6 |
| Investment returns of 4% instead of 6% | Year 7 |
| Investment returns of 8% instead of 6% | Year 14 |
| Mortgage rate of 6.0% | Year 7 |
| Mortgage rate of 7.5% | Year 14 |
Two things stand out. First, home appreciation matters more than the mortgage rate — a one-point swing in appreciation moves break-even by four to five years, and appreciation is the input nobody can predict. Second, the case for renting rests on actually investing the difference. Assume 8% returns and renting stays ahead until year 14; assume you spend the surplus instead and buying wins far sooner.
The mortgage interest deduction probably will not help you
Older rent-versus-buy math leaned on writing off mortgage interest. For most households that no longer applies. With the standard deduction where it is, the large majority of filers do not itemize at all, which means the deduction changes nothing for them. Our model assumes no tax benefit. If you do itemize, buying breaks even somewhat sooner than shown — but do not assume it without checking your own return.
What this means in practice
If you are confident you will stay put for ten years or more, the math supports buying at today’s rates under ordinary assumptions. If there is a real chance you move within five, renting is very likely the cheaper outcome, and it is not close. Between five and ten years, the answer depends entirely on your local rent and your local appreciation — which is exactly why a national average cannot answer it for you.
Run your own numbers
Your price, rent, rate and time horizon are what decide this, and all four differ from the national medians. The free Rent vs Buy Calculator runs the same net-worth comparison used above with your own inputs, including appreciation, investment return and selling costs — no signup. To work out what you can borrow in the first place, use the Home Affordability Calculator, and see how much house you can afford in 2026.
Buying with less than 20% down? The PMI Removal Calculator shows when that extra premium ends, and first-time buyer costs covers what lands at closing. State-specific closing costs are in the Closing Cost Calculator.
Methodology
Model assumes: $434,100 price, 10% down, 30-year fixed at 6.71%, property tax 1.1% of value annually, maintenance and insurance 1.5% annually, PMI 0.5% of the original loan until 78% LTV, 2% buying closing costs, 7% selling costs, 3% annual home appreciation, 3% annual rent growth, 6% annual investment return, no itemized tax deduction. Buyer and renter monthly budgets are equalized, with the lower-cost party investing the difference. Property tax, maintenance and insurance rates are assumptions, not measured national figures, and vary widely by state and property.
FAQ
How long until buying a house beats renting in 2026?
At the national median price of $434,100 with 10% down at 6.71%, buying takes about 10 years to beat renting if a comparable rental costs $2,600 a month. If that rental costs $2,200, buying does not pull ahead within 20 years. If it costs $3,000, buying wins in 5. The rent you avoid paying is the single biggest variable.
Is it cheaper to rent or buy right now?
Month to month, renting is cheaper almost everywhere in 2026. A median-priced home with 10% down carries about $3,627 a month once taxes, insurance, maintenance and PMI are included, versus a national median asking rent of $1,962. Buying wins over time through equity and appreciation, not through a lower monthly payment.
What is the break-even point for renting versus buying?
The break-even point is the year your net worth as an owner passes your net worth as a renter who invested the down payment and closing costs instead. It is not the year your equity turns positive. Selling costs of roughly 7% mean the first several years of ownership are usually spent recovering transaction costs.
Does the 5-year rule for buying a house still apply?
Not reliably at 2026 mortgage rates. The old guidance that you break even in about 5 years assumed lower rates and faster appreciation. At 6.71% with 3% annual appreciation, our model puts break-even closer to 10 years at typical rent levels, and beyond 15 years if appreciation slows to 2%.
Should I invest my down payment instead of buying?
It depends on the return you actually earn. In our model, raising the assumed investment return from 6% to 8% pushes the buying break-even from year 10 out to year 14. Renting and investing is a legitimate strategy, but it only wins if you genuinely invest the difference every month rather than spending it.