worth worrying about
Topics/HousingUnited StatesDenmark

Am I getting left behind financially by not buying a home?

Updated 30 Sep 2026·8 min read·US data
Our verdict
You
Worth a thought

No, as long as you invest what a buyer puts into their home. At today’s 7.0% mortgage rates, buying only pulls ahead after about 10 years, and even then not by much.

For you, with the numbers below: Worth a thoughtTest with your numbers ↓

The short version

A typical $369,000 US home costs about $2,700 a month to own at today’s 7.0% mortgage rate, once you add property tax, insurance and upkeep. The typical US rent is about $1,950. Put the $83,000 a buyer spends up front, and the monthly gap, into a broad index fund, and you stay ahead of the buyer until about year 10. After that the two stay within 5% of each other for decades. The catch: it only works if you really do invest the difference. Spend it, and the buyer is ahead by year 3.

The reasoning

1. Compare the money you don’t get back, not the monthly bill

Rent is gone once you pay it. So is most of an early mortgage payment: the interest, plus property tax, insurance and repairs on top. The part that pays down the loan is savings, so we leave it out. We also count what the buyer’s down payment and closing costs would have earned if they were invested instead. Economists call that the opportunity cost.

Money you don’t get back, per month, year one
Typical US home vs typical US rent
Buy
$2,980Rent
$1,950
Mortgage interest $1,720Property tax $270Maintenance $310Insurance $140Return lost on the cash up front $530Rent $1,950

That makes renting look like the clear winner, but it leaves out the buyer’s upside. At the 4.2% a year US home values have grown since 2000, a $369,000 home gains about $1,290 a month in year one. That’s why the race is close.

Source: our model. Home value and rent Zillow, Aug 2026; rate Freddie Mac PMMS, 24 Sep 2026; property tax Census ACS 2024; insurance NAIC, 2023.

2. Renting wins early. After that it’s close

Rent rises every year, but a fixed-rate mortgage payment doesn’t. Buying and selling a home also costs about 9% of its price, which the buyer has to earn back first. Put together, the renter who invests stays ahead for about 10 years. After that the lines run close together: the buyer’s lead never tops 5% of their net worth. The renter who spends the difference falls behind by year 3.

Net worth after selling costs and tax, typical US home
Same starting cash, same monthly budget
BuyRent and invest the differenceRent and spend it
$1.2M$800k$400k$0Break-even, year 9.9Year 0102030Source: our model with the starting assumptions in the calculator below.

3. Where you live moves the answer by decades

The national numbers hide big differences. In 11 of the 12 large metros we track, homes cost more relative to rent, property taxes are higher or prices grew more slowly since 2000, and renting and investing stays ahead for all 30 years. The exception is Miami, where prices grew fast and property taxes are low.

Years until buying beats renting and investing
Typical home value and rent in each metro, with each metro’s own growth since 2000
New York
30+
Los Angeles
30+
Chicago
30+
Dallas
30+
Houston
30+
Philadelphia
30+
Atlanta
30+
Boston
30+
San Francisco
30+
Seattle
30+
Detroit
30+
US typical
9.9
Miami
3.6
Source: our model; home values and rents Zillow, Aug 2026; rent growth BLS CPI; property tax Census ACS 2024; insurance NAIC state averages, 2023.
Test it with your numbers

Is it worth worrying about for you?

Your numbers stay in your browser

I rent in for $ a month, and I’m looking at a $ home with % down at %. I’d stay years and invest the difference.

Starting values are the typical home value and asking rent in the US (Zillow). Rentals tend to be smaller, so put in the rent for a place like the one you'd buy.

Growth rates likeThe US: homes 4.2%, rent 3.5%, stocks 8.0% a year.
Your verdict
Worth a thought

Buying leaves you $213 ahead at year 10.

That’s a small margin: under 15% of the buyer’s net worth. Break-even is year 9.9.

Buyer, year 10$267,117
Renter, year 10$266,903
Cost to own, month one$2,696
Break-evenYear 9.9
Your net worth over 30 years
After selling costs and tax. The line marks year 10, when you’d move.
BuyRent and invest the difference
$1.2M$800k$400k$0Year 10Year 0102030
What would flip it
Other assumptions
Rent growthBLS CPI rent, 2000–2026%/yr
Home price growthZillow home values, US typical, 2000–2026%/yr
Investment returnS&P 500 with dividends, 2000–2025%/yr
Of which dividendsShare paid out, MSCI USA, taxed every year%/yr
Property taxCensus ACS 2024%/yr
InsuranceNAIC, state average%/yr
MaintenanceRule of thumb%/yr
Buying costsFreddie Mac, CFPB%
Selling costsAgent fees and closing%
Tax on investment gainsLong-term capital gains and dividends%

What to do

If renting wins for you
  1. Automate the difference. Move a fixed amount into a broad index fund on payday, before you can spend it.
  2. Keep 3–6 months of expenses in a high-yield savings account, separate from your investments.
  3. Check again when your plans or rates change. A 1-point drop in mortgage rates moves the typical break-even from year 10 to year 5.
If buying wins for you
  1. Get quotes from at least three lenders. A quarter-point on a $295,000 loan is about $49 a month.
  2. Put 20% down if you can. Below that you pay mortgage insurance, about 0.5% of the loan a year, until you’ve paid the balance down to 78% of the price.
  3. Budget about 1% of the price a year for repairs.
  4. Keep total housing costs under about 30% of your gross income, the line HUD uses to define cost-burdened households.

Assumptions and sources

Starting values: a $369,000 home (Zillow Home Value Index, typical home, Aug 2026) and $1,950 a month rent (Zillow Observed Rent Index, Aug 2026); 7.0% 30-year fixed rate (Freddie Mac PMMS, 2026-09-24); 20% down; you stay 10 years. NAR’s median sale price is higher ($429,100 in Aug 2026) because it covers homes that sold, which skew larger than the typical home.

Growth since 2000: home values 4.2% a year (Zillow, Jan 2000–Aug 2026), rent 3.5% (BLS CPI rent of primary residence, Jan 2000–Aug 2026), stocks 8.0% (S&P 500 with dividends, 2000–2025, Damodaran). Over the last 10 years: 5.9%, 4.2% and 14.7%. Stocks have returned 10.0% a year since 1928. Forecasters expect less for the next decade: Vanguard 4.2–6.2% and J.P. Morgan 6.7% a year for US stocks.

Costs: property tax 0.9% of value a year (Census ACS 2024, median tax paid ÷ median value); insurance 0.5% (NAIC average HO-3 premium, 2023, as a share of the typical home value); maintenance 1% (Census and NAHB measure 0.6–1.5%); buying costs 2.5% (CFPB, Freddie Mac); selling costs 6.5% (about 5.5% agent commission per Clever Real Estate, Aug 2026, plus title and transfer taxes); mortgage insurance 0.5% of the loan a year below 20% down, until the balance reaches 78% of the price (Freddie Mac; Homeowners Protection Act).

Taxes: price gains are taxed at 15% when you sell, and dividends (1.9% a year, MSCI USA since 2000) at 15% as they’re paid, the long-term rate for single filers with taxable income up to $545,500 in 2026. Money in a 401(k) or IRA grows untaxed until you withdraw it, which would help the renter. Home sale gains are tax-free up to $250,000 after two years (IRS Section 121, single filer). We leave out the mortgage-interest deduction: the 2026 standard deduction is $16,100 for a single filer and about 9.5% of filers itemize (IRS). Renters insurance (about $173 a year, NAIC) and HOA fees are not modelled. Rent growth for each metro is that metro’s CPI rent index, which tracks what existing tenants pay.

General information, not personal financial advice. No one paid for this verdict. Last updated 30 Sep 2026.