Today, Purchasing a Home Is More Logical Than Renting: Here's Why

To buy, or not to buy. That is the question.

Given the drama that often unfolds as people navigate real estate transactions, it can seem downright Shakespearean.

Such dilemmas are felt rather acutely by renters who are wrestling with whether to buy and become homeowners. This is especially true as they reflect on the volatility of home prices and interest rates over the pandemic years. 

However, falling victim to myopic thinking which focuses only on the short-term could have costly consequences. 

If you're contemplating whether to rent or buy a home this year, it's worth taking into account the issue of rental affordability - right now and years into the future.

Renting has been a persistent challenge for many years, primarily due to the historical trend of rent prices consistently increasing over time. This is supported by Census data, which demonstrates that rents have been on a steady upward trajectory since 1988.

In addition, the most recent rental report from highlights that even though the growth rate of rents has slowed down since the peak of the pandemic, rents are still rising today.

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

Given the current state of the rental market, with rent prices substantially higher than they were in pre-pandemic years, buying a home may present a more favorable option. This is especially true if rent prices continue to trend upwards in the long term. On the other hand, homeowners who opt for a fixed-rate mortgage can secure a consistent monthly mortgage payment for the entirety of their loan, which typically spans 15-30 years.


If you require additional living space, owning a home might be a more cost-effective solution.

By utilizing data on the median rental payment from and median mortgage payment from the National Association of Realtors (NAR), the following graph presents a comparison between the two choices. As depicted in the graph, if you require two or more bedrooms, owning a home is generally a more cost-effective alternative to renting, depending on your space requirements.

If you're seeking a residence with two or more bedrooms to comfortably accommodate your household, or you require additional space to store your possessions or pursue your hobbies, purchasing a home may be a sensible option.


Acquiring a home provides you with the opportunity to begin building equity.

Aside from protecting you from escalating rent costs and providing a cost-effective means of acquiring additional space, homeownership affords you the opportunity to generate equity, which can contribute to the growth of your net worth. 

Moreover, as home values tend to appreciate over time, and you gradually pay off your mortgage, you can continue to accumulate equity. This equity can serve as a foundation for future success, enabling you to move up to a larger property in the future. In fact, according to Zonda, the primary incentive for millennial homeowners purchasing a home in the past year was to establish their own equity, rather than contributing to someone else's.


Bottom Line

If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options.

With rents rising across the Bay Area and nationwide, it may make more sense to pursue your dream of homeownership in the community where you live now, or perhaps somewhere altogether different. With connections to top real estate agents across the US, I've got you covered no matter where you want to be! 


Helping To Find Your Place In The World

Stephanie Sills - MBA, MIM, REALTOR®

Palermo Properties Team at COMPASS

DRE 02060529  |  650.678.5707 |  [email protected] 



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Stephanie is well equipped to understand today’s buyers and sellers by helping them to articulate and achieve their real estate goals.
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