It now takes an average of 15 years to break even on a home compared to renting — and nearly 50 years in these markets

It now takes an average of 15 years to break even on a home compared to renting — and nearly 50 years in these markets

Mike Crisolago

Sun, September 6, 2026 at 1:00 PM GMT+3 6 min read

To buy or not to buy? That is the question for Americans deciding whether their best real estate investment lies in purchasing a home or renting.

A new Zillow analysis makes that decision tougher, reporting that it takes the average new homeowner around 15 years "to break even on the purchase relative to renting."

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"There are two clocks ticking," Amanda Pendleton, Zillow's Home Trends Expert, told Moneywise. "The first clock is how long it takes to save for a down payment, driven by home prices relative to local incomes. The second is how long you need to own before buying beats renting financially."

According to Zillow's analysis, an average U.S. household requires eight-and-a-half years to save for a 20% down payment on a "typical single-family home," with a little over six years "before owning comes out ahead financially compared to renting a single-family home."

"Where rents are cheap, like Austin, buying has more ground to make up," Pendleton said. "Where rents are expensive, like Miami, owning starts looking good faster."

She added that areas with high home prices leave buyers "with a larger financial deficit, requiring more time to recover." And as Zillow found, the highest-priced markets could leave buyers waiting nearly 50 years to break even.

Where you live could make or break the math

According to the Zillow report, San Jose boasts the longest national break-even wait time for homeowners, at 49.2 years, with San Francisco (46.9 years), San Diego (40.4 years) and Los Angeles (37.7 years) close behind. Pittsburgh (11.1 years), Detroit (11.4 years), Indianapolis (11.5 years) and Cincinnati (12.2 years) have the shortest times.

Pendleton pointed to the housing shortage as a culprit, saying the U.S. "is short 4.7 million homes and the places with the biggest deficits tend to have the longest break-even timelines."

The median price for a single-family existing home rose 1.5% year-over-year in the second quarter of 2026 to $434,900, according to the National Association of Realtors (NAR). And the average 30-year fixed mortgage rate recently hit 6.89% — its highest since last June.

Rent for zero to two bedroom properties in the 50 largest U.S. metros, meanwhile, dropped for the 36th consecutive month in July, with Realtor.com adding that starter home renters in those cities save $858 a month more than those who buy homes there.

That said, while more renters are eschewing homeownership to invest that saved money elsewhere, some experts feel the stats don't tell the whole story.

Benjamin Clark, president of the National Association of Exclusive Buyer Agents (NAEBA), told Moneywise that "the biggest factor influencing that 15-year [Zillow] number is the assumption that a buyer must save a 20% down payment." Instead, he said buyers could opt for a 10% or less down payment to get in and let the equity build over time.

"Ultimately, a home purchase is a long-term investment, not a get-rich-quick scheme," he added.

And Jessica Lautz, NAR's Deputy Chief Economist and Vice President of Research, told Moneywise that, while various factors impact local markets, "every housing payment — whether made by a homeowner or renter — is helping pay down a mortgage. For homeowners, that payment builds their own piggy bank; for renters, it builds their landlord's."

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The right strategy starts with your timeline

Zillow's report said that starter homes are often an affordable option for aspiring homeowners, including fixer-uppers that can sell for 14% less than expected.

Pendleton suggested would-be buyers consider three questions: whether they can afford the full cost of ownership, how long they plan to stay in the home and what they want from their home.

"Do you want a backyard garden or a menagerie of pets? That's hard to get in a rental. Do you want the flexibility to move for a dream job or freedom from surprise repair bills? A rental may be a better fit for your lifestyle."

Lautz, meanwhile, advised that, for those who can get into the market, homeownership provides the most long-term financial security via the ensuing equity.

And Clark said that the primary consideration between buying and renting should be how long a person plans to live in an area.

"Renting absolutely has its place," he said — especially for those who plan to leave the area after a few years, "as transaction costs will eat up any short-term gains."

However, he cautioned that buyers often make unfair comparisons between the cost of a rental that fits their needs today and a home purchase that will fit their needs years down the road. Buying a smaller home now may cost more than renting, but it "locks in their acquisition cost at today's prices rather than paying what that larger home will cost in the future."

He added that waiting eight-and-a-half years to save a 20% down payment sacrifices "nearly a decade of equity growth." Instead, he advised those who plan to live in an area long term to work with an agent and find a home below the median price to get you into the market sooner.

"A fixed mortgage will stabilize your housing costs and quietly build your net worth," he said, "leaving you far ahead of where you would be if you continuously rented for those eight years."

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This article originally appeared on Moneywise.com under the title: It now takes an average of 15 years to break even on a home compared to renting — and nearly 50 years in these markets

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.