Worked example
Renting vs. buying a typical home in Seattle
A married couple earning $250K can buy a typical Seattle-Bellevue-Kent, WA home for $760K or rent a comparable one for $3,490 a month. With Rent vs. Buy's defaults for the metro, renting and investing the difference stays ahead for all 30 years. Here's why, and what would have to change.
The assumptions
Everything below is what Rent vs. Buy fills in when you pick this metro, except the income.
| Price, typical single-family home (Zillow) | $760,000 |
|---|---|
| Rent for a comparable house (Zillow) | $3,490/mo |
| Down payment, closing costs | 20%, 3% |
| 30-year mortgage (Freddie Mac, 2026-10-01) | 7.28% |
| Home prices grow (FHFA, 20-year average) | 4.12%/yr |
| Rent grows (BLS, 20-year average) | 3.51%/yr |
| Investments return | 7%/yr |
| Property tax, insurance, upkeep | 0.75%, 0.65%, 0.75% of value |
| Selling costs | 5.5% agents, 1.5% transfer tax and fees |
| Household | Married, $250,000 |
Year one
The mortgage payment alone is $4,160 a month. Add property tax, insurance, upkeep and a reserve for the roof and furnace, and owning costs $68,435 in the first year against $42,060 for renting. Itemizing the mortgage interest and property tax saves $4,017 in federal tax. The renter invests the $175K down payment and closing costs on day one, and the difference every month after.
Net worth if each household cashed out
| Year | Home value | Buyer | Renter | Buying is |
|---|---|---|---|---|
| 1 | $791K | $138K | $212K | −$74K |
| 5 | $930K | $311K | $379K | −$68K |
| 10 | $1.1M | $573K | $634K | −$61K |
| 20 | $1.7M | $1.3M | $1.4M | −$109K |
| 30 | $2.6M | $2.4M | $2.7M | −$277K |
Break-even: Never, in 30 years. The buyer closes the gap to $61K by year 10 as the loan pays down and the home appreciates. After that the renter's portfolio, compounding at 7%, outgrows a mostly paid-off house growing at 4.1%, and by year 30 the renter is $277K ahead.
What would make buying win
Changing one assumption at a time, keeping everything else at the defaults:
| If… | Buying breaks even after |
|---|---|
| Nothing changes | Never, in 30 years |
| Prices grow 6.1% a year, the last 10 years' pace | 4 years, 5 months |
| Prices grow 5% a year | 8 years, 2 months |
| A 6% mortgage | 8 years, 6 months |
| A 5% mortgage | 5 years, 6 months |
| Investments return 5% instead of 7% | 9 years |
The trade-offs
- Price to rent is the crux. The home costs 18.1 years of rent. At 7.28%, the first year's interest alone, $44,070, is more than a year's rent.
- The answer is sensitive to appreciation. Seattle prices grew 4.1% a year over 20 years and 6.1% over the last 10. Which past you expect to repeat decides it. They also fell 31% from 2007 to 2011.
- Renting only wins if the difference really gets invested. The model assumes the renter invests every dollar the buyer would have spent. A mortgage is forced savings; a brokerage account isn't.
- What it leaves out: refinancing if rates fall, the value of staying put or being free to leave, and the year-to-year swings around those averages.