Rent vs Buy · Updated June 2026
Rent vs buy in Houston
Houston in 2026: a typical centre apartment costs about $349,000 to buy ($4,100/m²) or $1,500/month to rent. With 20% down at 6.3%, the mortgage runs $1,728/month – but the true owner cost is $3,232/month once property tax (1.58%), maintenance, insurance, and HOA fees are added. On our 10-year model, renting and investing the difference wins for the entire period modeled.
The price-to-rent ratio tells the structural story: Houston's ratio of 19 sits in the contested middle where personal factors (horizon, stability, rates) decide. A renter who invests the $1,732/month difference plus the $69,800 down payment at 7% builds $394,160 over 10 years versus the buyer's $222,343.
Rent vs buy calculator · 2026
Verdict at your horizon
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- Mortgage P&I
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- Owner all-in /mo
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- Cash needed upfront
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- PMI
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- Buyer net worth
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- Renter net worth
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- Interest paid by then
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- Price-to-rent ratio
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Net worth year by year
Renter invests the down payment + closing costs + monthly difference at your chosen return. PMI of 0.55%/yr is added automatically while the down payment is under 20% and equity is below 20%. Price-to-rent under ~15 usually favors buying; over ~20 favors renting.
Key insights
Key insights
- Typical buy $349,000 vs rent $1,500/mo – price-to-rent ratio 19.
- All-in owner cost: $3,232/mo vs $1,500 rent.
- 10-year outcome: buyer $222,343 vs renter $394,160.
- No breakeven within 10 years at 6.3% – renting wins this window.
- Income check: owner cost wants ≥ $9,793/mo net income.
| Year | Buyer net worth | Renter net worth (invested) | Buying advantage |
|---|---|---|---|
| 1 | $59,971 | $103,958 | -$43,987 |
| 3 | $91,024 | $155,708 | -$64,684 |
| 5 | $124,735 | $213,951 | -$89,216 |
| 7 | $161,354 | $279,583 | -$118,229 |
| 10 | $222,343 | $394,160 | -$171,817 |
The Houston numbers under the model
Inputs (2026, adjustable in the calculator): purchase $349,000, 20% down, 6.3% 30-year fixed, rent $1,500/month growing 3%/year, home appreciation 3.5%/year, market return 7%/year, 1.58% property tax, 1% maintenance, ~7% selling costs at exit. The buyer's wealth lives in equity (principal + appreciation minus exit costs); the renter's lives in the invested down payment and monthly differences compounding.
Early years punish buyers everywhere: at 6.3%, roughly 85% of the first year's payments is pure interest, while ~3% buying costs and ~7% future selling costs must amortise before equity wins. That's why short horizons (under 8 years here) favour renting in Houston regardless of headlines.
What flips the answer
Rate sensitivity: at 4.8% the breakeven moves into buying territory; at 7.3% renting wins even longer. Down-payment opportunity cost matters just as much – if your alternative to buying is cash at 2%, not stocks at 7%, buying improves sharply.
Stability is the unpriced variable: owners are insulated from Houston's rent growth ($1,500 today is $2,016 in 10 years at 3%) but pay dearly to move early. The honest rule for Houston: buy when your horizon comfortably exceeds 10 years and the payment fits under 33% of net income – $9,793/month of take-home for this scenario.
FAQ
Frequently asked questions
Is it better to rent or buy in Houston right now?
On 2026 numbers ($349,000 purchase, $1,500 rent, 6.3% rates), renting and investing the difference wins for the entire period modeled. Horizons shorter than that favour renting; longer ones favour buying – run your own inputs above.
How much do I need to buy in Houston?
For a typical $349,000 purchase: $69,800 down (20%) plus ~3% closing costs ≈ $80,270 cash, and an all-in carrying cost of $3,232/month – comfortably supported by $9,793+/month of net income.
What is the price-to-rent ratio in Houston?
About 19 ($349,000 ÷ $18,000 annual rent). Above ~22 renting+investing historically wins; below ~16 buying does; between is horizon-dependent.
Does the model include all ownership costs?
Yes: mortgage at 6.3%, 1.58% property tax, 1%/year maintenance, insurance, $350/month HOA, ~3% buying and ~7% selling costs – the lines most "rent is throwing money away" arguments skip.
What if rates fall?
Each 1-point rate drop cuts the payment ~$178/month on this purchase and pulls breakeven earlier. Buying at high rates with a refinance option has asymmetric upside – but never underwrite the purchase on the refi you might get.
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