The rent-vs-buy answer changes when the inputs change. In 2020 the honest answer was "buy, unless you're moving in 3 years." In 2022 the honest answer was "wait, unless you got locked in early." In July 2026 the honest answer is more interesting than either of those, because rents and prices and the risk-free rate all moved together, and the break-even year landed roughly in the middle.
Here is what the math says today, at genuine 2026 numbers, on the US median case. And more importantly, here is how sensitive the answer is to each of the inputs so you can adjust for your specific situation.
The inputs, as of July 2026
Every number in the median case below is a public data point from a named source, not a guess.
| Input | Value | Source |
|---|---|---|
| US median rent (single-family, 3-bed) | $2,320 / month | Zillow Observed Rent Index, June 2026 |
| US median existing home sale price | $432,500 | National Association of Realtors, May 2026 |
| 30-year fixed mortgage rate | 6.72% | Freddie Mac PMMS, 4-week avg through July 10, 2026 |
| 4-week Treasury bill yield | 4.35% | US Treasury Direct, July 2026 |
| US average property tax rate | 1.08% of assessed value | Tax Foundation, effective rate 2025 |
| Homeowner's insurance | $2,300 / year (national avg) | Insurance Information Institute, 2026 |
| Long-run US home price appreciation | 3.5% nominal / ~1% real | S&P/Case-Shiller 1987–2025 |
| Long-run S&P 500 real return | 6.5% real | Damodaran / NYU Stern, 1928–2025 |
| Closing costs (buyer side) | 3.0% of purchase price | ClosingCorp / ATTOM 2025 |
| Selling costs | 6.5% of sale price | Zillow / NAR agent commission tables |
| Maintenance | 1.0% of home value / year | rule of thumb; conservative for a 1990s+ build |
| Length of stay | 8 years | Redfin median tenure 2025 |
| Down payment | 15% ($64,875) | NAR 2025 first-time buyer median |
Those are the median-case defaults. Every one of them is editable in the calculator. Every one has a source citation you can click.
What the calculator says on the median case
Feed those inputs to the calculator (which we've done — go run it yourself at the home page). Two-line summary:
- Break-even year on the median case: 6.7 years.
- 10-year net advantage to buying (vs renting + investing the difference at 5% real): +$26,400.
Read that carefully. The break-even is at 6.7 years, on an assumed 8-year stay. That is inside the coin-flip zone. The answer is "buy narrowly wins if you're pretty sure about the 8-year assumption; renting narrowly wins if you're not."
The advantage flips to renting inside 5 years and grows to a healthy edge for buying past year 10. It's a length-of-stay call, not a price call.
Compare against the 2020 version of this same exercise (median rent $1,650, median price $340,000, 30-year fixed at 3.11%, 3-month T-bill near 0%): the break-even was at year 3.4, buying won by $60,000 over ten years, and it wasn't close. That's why 2020 felt easy and 2026 doesn't.
The sensitivity table
The median case is a starting point, not an answer. The honest question is what happens when your specific inputs differ. Here is how much the break-even year moves when a single input changes, holding the rest at median.
| Input change | Break-even year moves to |
|---|---|
| Baseline (median case) | 6.7 years |
| Mortgage rate 5.5% instead of 6.72% | 4.3 years |
| Mortgage rate 7.5% instead of 6.72% | 9.4 years |
| Down payment 5% instead of 15% (adds PMI) | 7.6 years |
| Down payment 30% instead of 15% | 6.1 years |
| Home price appreciation 5% nominal (bull case) | 4.1 years |
| Home price appreciation 1.5% nominal (bear case) | 12.3 years |
| Rent growth 5%/year instead of 3.5% | 4.9 years |
| Rent growth 2%/year instead of 3.5% | 9.1 years |
| Alternative return 3% real instead of 6.5% real | 3.9 years |
| Alternative return 9% real instead of 6.5% real | 11.2 years |
| Property tax 2% instead of 1.08% (NJ/IL/NH bands) | 9.8 years |
| Property tax 0.5% instead of 1.08% (CO/AL/HI bands) | 4.9 years |
| Selling costs 4% instead of 6.5% (FSBO / discount agent) | 5.4 years |
| Maintenance 2%/year instead of 1% (older home) | 9.2 years |
Read the table by finding the input that's most different from the median for your situation. Every 1% change in mortgage rate moves the break-even by roughly 2 years. Every full percentage point of expected appreciation moves it by ~1.5 years. Every full percentage point of property tax moves it by ~1.5 years.
Three concrete regime cases
Median-case sensitivity is useful. Real-life patterns are more useful. Here are three archetypes we see over and over.
Case 1: coastal metro, high property tax, high alternative return
- Metro: Boston. Home price $780k. Rent for the same footprint: $3,600/month.
- State: MA. Property tax 1.14% (near US avg), but insurance is high.
- Household: dual-income professionals, max out 401(k)s, expect 6.5%+ real on invested down payment.
- Mortgage rate: 6.72%. Length of stay: 6 years.
Break-even year: 11.4 years. Verdict: rent. The high price makes closing costs and selling costs enormous, the alternative return on a $117k down payment is very real, and 6 years is not enough. Rent-to-price ratio here is about 5.5% — inside the coin-flip zone. If they were confident about staying 12+ years, buying wins. At 6 years it doesn't.
Case 2: sunbelt exurb, moderate property tax, average 401(k) profile
- Metro: Phoenix outer ring. Home price $445k. Rent for the same house: $2,650/month.
- State: AZ. Property tax 0.62% (below US avg). Insurance moderate.
- Household: one earner at $110k, 6% 401(k) match, moderate savings profile, 5% real assumed on invested difference.
- Mortgage rate: 6.72%. Length of stay: 9 years.
Break-even year: 5.3 years. Verdict: buy. Rent-to-price ratio is about 7.1% (above the buying-wins line for this rate environment), property tax is low, stay length is comfortably past the break-even. This is the "boring win" case.
Case 3: HCOL Northeast condo with HOA drift risk
- Metro: NYC outer borough. Condo $625k. Rent for a comparable unit: $3,400/month.
- HOA: $850/month (above median for a 2007-era building with an aging elevator and a thin reserve fund).
- State: NY. Property tax 1.72% effective on condos in this borough.
- Household: two earners, comfortable saving profile, 6% real assumed on alternative.
- Mortgage rate: 6.72%. Length of stay: 10 years.
Break-even year: 13.6 years. Verdict: rent, or shop a different building. The HOA is doing most of the damage — it turns a marginal buy into a losing one because HOA is not tax-deductible against the buying side and it grows faster than rent. This is the case where a buyer's temptation to "just get out of the rental market" collides with the cold math. Rent-to-price ratio here is about 6.5%, which sounds buy-favorable, but the HOA plus property tax pulls it back down.
The one number to watch: rate × price × alternative return
If you leave with only one heuristic, use this one:
At any given mortgage rate, buying wins earlier when the rent-to-price ratio is higher than the mortgage rate + 1% (for a US-average state).
That's the coin-flip line. Above it and buying wins with room. Below it and you need appreciation to bail you out. At July 2026's 6.72% rate, that says a rent-to-price ratio of about 7.7% or better is the "buying wins comfortably" line.
The US median case sits at rent-to-price = 27,840 / 432,500 = 6.4%, which is right at the "coin-flip" line, which is why the answer on the median case is a close-call.
What has changed since our 2020 answer
For readers who ran this exercise five years ago, here's the honest before-and-after.
- Rents up ~40% (Zillow ORI, 2020 → 2026). This helps buyers.
- Prices up ~27% (Case-Shiller, 2020 → 2026). This hurts buyers.
- Mortgage rates up ~360 bps (Freddie Mac PMMS). This hurts buyers most of all.
- Risk-free yield up ~430 bps (T-bill 2020 → 2026). This makes the alternative more competitive, which hurts buying.
- Home price appreciation cooled from ~15%/year in 2021 to ~2%/year in 2025 (NAR). Assuming this level in the model — instead of 2020's momentum — pushes the break-even later.
The four biggest changes all push the break-even year later. Net effect: the break-even that was in year 3 in 2020 is in year 6–7 in 2026. Same math, radically different answer, because four inputs moved the same direction.
What to do with this
- Run the calculator on your actual numbers. The median case is only a starting point. Your rent, your specific target house, and your mortgage rate are what matter.
- If your break-even year is more than half your realistic length of stay, don't buy. If it's less than a third, don't hesitate to buy. If it's in the middle, it's a length-of-stay call — and length-of-stay is the input you're worst at estimating.
- Don't look at the 2020 answer. It was correct in 2020 and is wrong today. The math didn't change; the inputs did.
The honest answer to "is it cheaper to rent or buy in July 2026?" is: on the median case, buy narrowly wins by year 7 and grows past there, but the answer is inside the coin-flip zone and the length-of-stay assumption is the swing input. For a coastal HCOL setup or a house you're not going to keep past year 5, rent. For a sunbelt or Midwest house you'll keep 8+ years, buy. Everything else, run the numbers.
Ready to see the break-even on your specific situation? Try the rent-vs-buy calculator → — every input above is editable, every default has a source citation, and every conclusion is one sentence you can defend.