Is it better to rent or buy in 2026?
The age-old question of "is it worth renting?" has never been more relevant. With interest rates fluctuating and home prices at historic highs, the decision isn't just about monthly payments—it's about net worth comparison.
Our calculator takes into account the opportunity cost of your down payment. If you didn't buy a house, that large sum of cash could be growing in the stock market (S&P 500 averages ~7-10%).
Key Factors to Consider
- Rent Inflation: Rents typically rise by 3-5% annually. A fixed-rate mortgage locks in your P&I payment (though taxes and insurance still rise).
- Home Appreciation: Real estate historically appreciates, but it's not guaranteed. 3-4% is a conservative long-term estimate.
- Transaction Costs: Buying costs ~3% to close. Selling costs ~6-8%. This "frictional cost" means buying short-term is almost always a loss.
The 5-Year Rule
Generally, if you plan to stay in a location for less than 5 years, renting is often mathematically superior due to the high transaction costs of buying and selling real estate.