Rent vs Buy Calculator by City: Where Ownership Pays Off

The rent vs buy decision depends on local prices, interest rates, and how long you plan to stay. This guide breaks down the math by city and provides a calculator to find your breakeven point.

The 5-Year Rule

Historically, buying makes sense if you stay at least 5 years. This gives appreciation time to offset closing costs and selling fees. In hot markets, breakeven drops to 3 years. In flat markets, it extends to 7+.

Monthly Cost Comparison

Renting: Monthly rent + renter’s insurance

Buying: Mortgage + property tax + insurance + HOA + maintenance

Example in Austin, TX:

• Median home: $550,000

• 20% down: $110,000

• Mortgage at 7%: $2,900/month

• Property tax: $1,100/month

• Insurance: $150/month

• Maintenance: $400/month

• Total ownership: $4,550/month

• Median rent (2BR): $2,200/month

• Renting saves $2,350/month

But the owner builds equity. After 5 years, the owner has roughly $80,000 in equity (appreciation + principal paydown). The renter has $0 equity but saved $141,000 in lower monthly costs. If invested at 5%, those savings grow to $160,000.

Breakeven Calculation

Breakeven happens when equity gains exceed the excess cost of owning plus opportunity cost of the down payment.

Using our calculator:

• Input home price, down payment, interest rate, rent, and expected appreciation
• It outputs the year when buying becomes cheaper than renting
• Includes opportunity cost of down payment invested elsewhere

City Rankings: Buy-Friendly Markets

City	Price-to-Rent Ratio	Recommendation
Detroit, MI	8	Strong buy
Cleveland, OH	9	Strong buy
Pittsburgh, PA	10	Strong buy
Memphis, TN	11	Buy
Chicago, IL	13	Buy
Houston, TX	14	Neutral
Denver, CO	18	Neutral
Seattle, WA	22	Rent
San Francisco, CA	25	Rent
New York, NY	24	Rent

Lower ratios favor buying. Higher ratios favor renting.

Using Our Calculator

Our rent vs buy calculator customizes results by city. It includes:

• Local property tax rates
• Typical HOA fees
• Historical appreciation by metro area
• Closing cost estimates

When Buying Wins

• You stay 7+ years
• Prices are rising steadily
• Mortgage payment is close to rent
• You value stability and customization

When Renting Wins

• You might move within 3 years
• Prices are flat or declining
• Rent is significantly cheaper than ownership cost
• You prefer flexibility

The Bottom Line

Rent vs buy is a math problem disguised as a lifestyle choice. Use our calculator to find the numbers for your city. Then decide based on facts, not feelings.