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Renting vs buying

Renting vs Buying a House in 2026 — The Real Math (and How Long You Must Stay)

"You're throwing money away on rent." You have heard it from family, friends and probably a real estate agent. In 2026 that advice needs a calculator, not a slogan. Freddie Mac's survey for the week ending November 12, 2026 puts the average 30-year fixed mortgage at 7.11% — down from 7.18% the week before, the fourth weekly decline in a row. The National Association of Realtors' October 2026 report puts the median existing-home price at $416,700, up 0.4% on a year earlier, while sales fell to their lowest pace since August 2010. At these rates the gap is wide — and the real question is not "rent or buy?" but "how long will you stay?"Photo: The median existing home sold for $416,700 in October 2026 — but the median is not your price. Run the math on the home you would actually buy. (Photo: Pexels) What You Will LearnThe real monthly cost of owning at 7.11% The round-trip cost that sets a minimum stay Why two calculators give breakeven answers years apart The price-to-rent test for your own city What the tax deduction really saves The stay testStep 1: Count the full monthly cost of owning — not just the mortgage What to do: Add up every monthly cost of owning first. How: Most calculators show principal and interest only; the Consumer Financial Protection Bureau warns that understates the real bill. Take a home at $417,000 — the national median, rounded — with 20% down ($83,400), so the loan is $333,600. At the 7.11% 30-year fixed rate from Freddie Mac's November 12, 2026 survey, principal and interest come to $2,244 a month. Then add tax at about 1% of value a year ($348), insurance at about 0.5% ($174), and maintenance at about 1% ($348). The all-in cost is about $3,113 a month — about $1,013 more than rent of $2,100, or roughly $12,155 a year. Example: In year one, about $23,612 goes to interest and only about $3,318 pays down the loan. Common mistake: Comparing rent with principal and interest only. Tax, insurance and maintenance add about $870 a month here.Illustrative diagram - The six steps to the real rent-vs-buy answer. NOT a real Freddie Mac screenshot. Step 2: Price the round trip — what it costs to get in and out What to do: Add the cost of buying and the cost of selling. How: On a $417,000 home, closing costs of about 3% are about $12,510, and selling costs of about 6% about $25,020. The round trip is about $37,530 — roughly 9% of the price, gone whether the home's value rises or falls. Five years of the $1,013-a-month gap is about $60,774, plus the $37,530. Only two things can repay that $98,000-plus: the equity you build, and any rise in the home's value. In year one you build only about $3,318. The CFPB warns: sell within the first few years and you may have no more equity than you started with. Example: Stay two years, then sell: about $24,000 more than rent plus about $37,530 round-trip, while paying down only about $6,800 of the loan. Common mistake: Treating the down payment as the cost of buying. It comes back when you sell; the $37,530 round trip does not.Illustrative diagram - Owning a $417,000 home costs about $3,113 a month all-in, against $2,100 rent. NOT a real Freddie Mac screenshot.Photo: The down payment comes back when you sell — the roughly $37,500 round trip of closing and selling costs does not. (Photo: Pexels)Illustrative diagram - The round trip: about $37,530 to get in and out of a $417,000 home. NOT a real CFPB screenshot. Step 3: Find your breakeven — and distrust any single number What to do: Run a rent-vs-buy calculator, then run it again with different assumptions. How: Breakeven is the year when owning, counting the equity you keep, finally costs less than renting. Two honest calculators give very different answers because they assume different futures. One calculator's example — a $430,000 home, 20% down, 6.3%, $2,100 rent — puts breakeven at 10 or more years, 15 or more at 6.3% to 7.5%. Another, assuming 3.5% price growth, 3% rent growth and the monthly gap invested, finds about 5 years and 4 months. Same question, answers five to ten years apart. The CFPB's advice: try several scenarios and look at the range. Both were also run below today's 7.11%, and a higher rate pushes breakeven later. Example: At 3.5% a year, a $417,000 home is worth about $495,000 after five years; flat, it is still worth $417,000. One assumption moves the answer by years. Common mistake: Quoting one breakeven year as a fact. Quote the assumptions with the year.Illustrative diagram - Two calculators, two answers: the assumptions are the answer. NOT a real calculator screenshot. Step 4: Run the price-to-rent test on your own city What to do: Divide the price by a year's rent for a comparable place, and read it against the 15 and 20 lines. How: Price-to-rent is the quickest screen: price divided by annual rent for a similar home. Under about 15 usually favours buying, over about 20 usually favours renting, and 15 to 20 is the grey zone. Our example — $417,000 against $25,200 of annual rent — is 16.5, inside the grey zone. But local differences are huge: the October 2026 median is $324,300 in the Midwest and $360,900 in the South, against $519,600 in the Northeast and $624,300 in the West. Run it on the home you would actually buy and the rent you would actually pay, in the same neighbourhood. Example: A $300,000 home at $2,100-a-month rent gives 11.9 — buying usually wins. A $600,000 home at the same rent gives 23.8 — renting usually wins. Common mistake: Using the national median price and a national average rent. The ratio only means something with local numbers.Illustrative diagram - Price-to-rent: under 15 usually favours buying, over 20 usually favours renting. NOT a real NAR screenshot.Photo: The rent-vs-buy answer changes by city — the median is $324,300 in the Midwest and $624,300 in the West. Test your own neighbourhood. (Photo: Pexels) Step 5: Check the tax deduction honestly — it may save you nothing What to do: Check whether the deduction beats your standard deduction. How: The IRS lets homeowners who itemize deduct the interest on the first $750,000 of mortgage debt for loans after December 15, 2017 (Publication 936). But only if you itemize on Schedule A — take the standard deduction and you get nothing. The deduction also shrinks every year: year-one interest here is about $23,612, and it only goes down. Publication 936: the PMI deduction has expired, and home-equity interest is deductible only if the money was used to buy, build or improve the home. With less than 20% down you also pay PMI of about 0.55% a year — about $153 a month here — not deductible. Example: Itemize and you save tax on $23,612 of first-year interest. Take the standard deduction and you save $0. Common mistake: Treating the interest as a refund. It is a deduction, and only if you itemize. Step 6: Decide on time, money and life — the stay test What to do: How long will you stay, can you afford the worst month, and would a move be your choice? How: First, the stay: buying only wins if you stay long enough to repay the round trip — roughly $37,530 plus years of a $1,013-a-month gap. If you may move within a few years, the CFPB says renting may be better. Second, the money: closing costs, a repair reserve, and an emergency fund on top of the down payment. If a $5,000 repair would go on a credit card, you are not ready. Our earlier guides cover affordability — see how much house can you afford in the USA in 2026 and how much down payment you need to buy a house. Third, the life: renting buys flexibility, owning buys stability and space. If rates fall later, refinancing is the escape hatch — see should you refinance your mortgage in 2026. Example: Two buyers, same home: one stays ten years and sells after the round trip is repaid; the other moves after two years and pays the round trip twice, with almost no equity built. Common mistake: Buying because rent feels wasted, while ignoring the stay. A short stay in a bought home is the most expensive housing of all.Illustrative diagram - Six mistakes that make rent vs buy go wrong. NOT a real CFPB screenshot. Checklist ☐ Full monthly owning cost counted. ☐ Round-trip costs priced — about 9% of the price. ☐ Breakeven run on two calculators, assumptions written down. ☐ Price-to-rent run on local numbers. ☐ Tax deduction checked — do I itemize? ☐ Down payment, closing costs, repair reserve saved. ☐ Honest stay answer — long enough to repay the round trip? FAQ Is it better to rent or buy a house in 2026? It depends on how long you will stay. At 7.11%, owning a $417,000 home costs about $3,113 a month all-in against about $2,100 rent, with a round trip of about $37,530. How long must you stay for buying to beat renting? No single number. One model puts breakeven at 10 or more years (15 or more at 6.3% to 7.5%); another, with 3.5% price growth, 3% rent growth and the gap invested, puts it at about 5 years and 4 months. What is a good price-to-rent ratio? Under about 15 usually favours buying, over about 20 usually favours renting. Our example is 16.5. Use local numbers. Does the mortgage interest deduction make buying cheaper? Only if you itemize. The IRS lets you deduct interest on the first $750,000 of mortgage debt for loans after December 15, 2017; with the standard deduction you get nothing. What mortgage rate should I use in the rent-vs-buy math? The latest one. Freddie Mac's survey for the week ending November 12, 2026 puts the 30-year fixed at 7.11% and the 15-year at 6.45%. SourcesFreddie Mac, Primary Mortgage Market Survey, week ending November 12, 2026 — 30-year fixed 7.11%, 15-year 6.45% (opened live November 12, 2026): https://www.globenewswire.com/news-release/2026/11/12/3402013/0/en/mortgage-rates-decline-for-fourth-consecutive-week-to-7-11.html National Association of Realtors, Existing-Home Sales, October 2026 — median price $416,700, single-family $421,900 (opened live November 12, 2026): https://www.nar.realtor/newsroom/existing-home-sales-decreased-5-5-percent-october-nar-report IRS Publication 936 (2025), Home Mortgage Interest Deduction — $750,000 limit, PMI deduction expired (opened live November 12, 2026): https://www.irs.gov/publications/p936All figures checked November 12, 2026. Breakeven figures are calculator results quoted with their assumptions. Disclaimer: For education only, not mortgage, tax or investment advice. Rates and rules change often — get your own quotes before you buy or rent.