Buy vs Rent Calculator

Depends on your location and stay length. Most US markets favor renting for stays under 5 years and buying for 7+ years. Major coastal cities (SF, NYC, LA) have crossover periods of 8-12+ years due to high price-to-rent ratios. Smaller metros and Sun Belt cities often have 3-5 year crossovers.

Below 15: strongly favors buying. 15-20: depends on stay length and other factors. 21+: strongly favors renting. NYC, SF, San Diego often hit 25-40 — buying is hard math. Cleveland, Detroit, Pittsburgh: ratios below 15 — buying often clearly better.

Average breakeven horizon is 5-7 years for most US markets. Below that, transaction costs (closing + selling = 8-15% combined) eat any equity buildup. Use the NYT Buy vs. Rent calculator (or our calculator) with your specific numbers — local appreciation rates and mortgage rates change the answer significantly.

Less than it used to. The Tax Cuts and Jobs Act (2017) raised the standard deduction so most homeowners no longer itemize. Mortgage interest deduction now benefits primarily those in high-cost areas with large mortgages (over ~$400K) AND high state income taxes (NY, NJ, CA). Most middle-class homeowners take the standard deduction.

1% rule: 1% of home value per year. So a $400K home: $4,000/year for maintenance, repairs, capital expenditure (new roof every 20-30 years, HVAC every 10-15, water heater every 8-12). Older homes typically run 1.5-2%. Newer construction in good condition: 0.5-1%. Always budget for capital reserve.

Significant. A $80K down payment invested in S&P 500 (10% nominal historical) becomes ~$130K in 5 years, ~$210K in 10. So buying gives up that growth in exchange for home appreciation (3-5% historical). Math depends on local rent prices, home appreciation, and your investment alternative. The calculator captures this directly.

Misleading framing. Mortgage interest in years 1-10 is also "thrown away" in the sense that it doesn't build equity. Property tax and maintenance never build equity. The accurate comparison is total cash outflow vs. total cash outflow + equity buildup + appreciation, both adjusted for opportunity cost. NYT and Bogleheads have detailed calculators.

US national average historical home appreciation: 3-4% nominal (about CPI + 1%). So $400K home becomes ~$540K in 10 years. But appreciation is highly local — coastal California has averaged 5-7%, while Detroit has lost real value over 50 years. Use historical local data (Zillow ZHVI) for your specific market — don't assume 6-7% across the board.