When Does Buying Become Cheaper Than Renting?

What break-even means

Break-even is the point where the cumulative net cost of owning — total spent, less equity you would recover after selling costs — falls below the cumulative cost of renting the equivalent home.

It is measured in years, not months, because buying and selling costs alone commonly total 8% to 10% of the price.

What moves it

• Earlier: fast rent growth, strong appreciation, low interest rates, low transaction costs, long tenure
• Later: high purchase price relative to rent, high maintenance, HOA dues, flat or falling prices, moving within a few years

Test the assumptions, not the answer

Any break-even figure is only as good as its appreciation assumption. Rather than trusting a single number, run several scenarios and look at how stable the answer is across them.

Keep reading

• Renting vs. Buying

  The real trade-offs, and the variables that actually decide the outcome.

• What Costs More: Renting or Owning?

  A category-by-category cost comparison of the two housing paths.