Switching from Renting To Buying a Home in 2026: Which Will Cost Less?
- Author: Aubrey Sipes
- Posted: 2025-12-07
As we look toward 2026, prices for both renting and buying homes are changing, and it's smart to ask which will be easier on your wallet.
Renting May Be Cheaper in 2026
Recent reports show that national rent prices went down by about 1.1% over the last year. This drop is mainly because more apartments are available, which gives renters more choices and better deals.
Even so, experts believe rent will likely go up in 2026. Right now, average monthly rent across the country is about $1,631 for a one-bedroom apartment and $1,887 for a two-bedroom.
Although these prices might rise, buying a home could cost even more since home prices are expected to grow as well, possibly by about 4%.
The Cost of Buying a Home
Buying a home comes with bigger upfront expenses and long-term financial commitments. Here are some key things to consider if you’re thinking about buying:
- Home Prices: The average value of a home in the U.S. is currently about $360,727, and prices are slowly rising.
- Mortgage Rates: The interest rate for a 30-year mortgage is expected to drop to about 6% in 2026, which is a bit lower than it has been.
- Upfront Costs: When you buy a home, you pay closing costs (usually 3% to 4% of the home’s price). For a $400,000 home, that’s $12,000 to $16,000 just for closing.
- Down Payment: Most lenders ask for at least 3.5% of the home’s price, but putting down 20% helps you avoid extra insurance costs.
- Monthly Costs: Besides the mortgage, you’ll pay for things like property taxes, home insurance, maintenance, and sometimes homeowners’ association (HOA) fees.
Renting Also Has Costs
Renting doesn’t have the upfront costs of buying a house, but it’s not fee-free. Renters often pay:
- A deposit (usually a month’s rent or more)
- Pet fees (if you have animals)
- Charges for things like parking or trash service
- "Junk fees," such as application fees, which can add up
While renters don’t pay interest like homeowners do, rent payments over time do add up. For example, paying $2,000 every month for 30 years comes out to $720,000—without building any equity in a property.
Final Thoughts
For most people, renting will probably be less expensive than buying a home in 2026—at least at first. Renting is a good choice if you’re not planning to stay long-term or if you don’t want to pay a lot upfront.
On the other hand, buying a home lets you build equity (ownership) and avoid the risk of rent increases, but you still need to budget for property taxes and insurance.
Whether you should rent or buy depends on your plans and financial situation. Take the time to figure out what works best for your needs.
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