Another very important factor is how long you plan to stay in your home. Generally, the longer you plan to remain in your home, the more it makes sense to buy. In his calculator, Reagan emphasizes the “breakeven point,” or how long it takes before the benefits of homeownership outweigh the savings from renting.The median price-to-rent ratio in the U.S. was about 14.3 in 2024, according to an analysis by real estate firm Clever.Reagan’s calculator helps illustrate how those costs affect the outcome. When you ...

Core Insights - Economic factors such as mortgage rate drops and lower home prices may not sufficiently enhance affordability in certain cities, leading to a continued preference for renting over buying [1] Group 1: Housing Affordability - Real estate experts predict that in some cities, renting will remain cheaper than buying a home by 2026 [2] - The Total Monthly Housing Cost (TMOC) is a crucial metric that includes principal and interest, taxes, insurance, and HOA maintenance, which provides a more comprehensive view of housing costs [3] - In markets where TMOC exceeds twice the median rent, renting is financially smarter for those not planning to occupy the home long-term [4] Group 2: Case Studies - In San Jose, California, the median home price is projected to remain around $1.45 million, while the median rent for a three-bedroom unit is approximately $3,300, resulting in a price-to-rent ratio of 36.6 [5] - The TMOC in San Jose, with a 10% down payment and a fixed 6.5% interest rate, exceeds $10,000 per month, creating a cash flow gap of $7,000 compared to renting [6] - In Miami, the condo market reflects a similar trend where insurance and assessment costs significantly inflate the total cost of ownership, making renting a more viable option [7][8]