Rent vs Buy · Updated June 2026
Rent vs buy in San Francisco
San Francisco in 2026: a typical centre apartment costs about $1,063,000 to buy ($12,500/m²) or $3,700/month to rent. With 20% down at 6.3%, the mortgage runs $5,264/month – but the true owner cost is $8,126/month once property tax (0.75%), 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: San Francisco's ratio of 24 is high – markets above ~22 historically favour renters who invest the difference. A renter who invests the $4,426/month difference plus the $212,600 down payment at 7% builds $1,100,907 over 10 years versus the buyer's $677,221.
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 $1,063,000 vs rent $3,700/mo – price-to-rent ratio 24.
- All-in owner cost: $8,126/mo vs $3,700 rent.
- 10-year outcome: buyer $677,221 vs renter $1,100,907.
- No breakeven within 10 years at 6.3% – renting wins this window.
- Income check: owner cost wants ≥ $24,623/mo net income.
| Year | Buyer net worth | Renter net worth (invested) | Buying advantage |
|---|---|---|---|
| 1 | $182,662 | $309,429 | -$126,767 |
| 3 | $277,244 | $451,087 | -$173,843 |
| 5 | $379,923 | $610,216 | -$230,293 |
| 7 | $491,458 | $789,192 | -$297,734 |
| 10 | $677,221 | $1,100,907 | -$423,686 |
The San Francisco numbers under the model
Inputs (2026, adjustable in the calculator): purchase $1,063,000, 20% down, 6.3% 30-year fixed, rent $3,700/month growing 3%/year, home appreciation 3.5%/year, market return 7%/year, 0.75% 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 San Francisco 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 San Francisco's rent growth ($3,700 today is $4,972 in 10 years at 3%) but pay dearly to move early. The honest rule for San Francisco: buy when your horizon comfortably exceeds 10 years and the payment fits under 33% of net income – $24,623/month of take-home for this scenario.
FAQ
Frequently asked questions
Is it better to rent or buy in San Francisco right now?
On 2026 numbers ($1,063,000 purchase, $3,700 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 San Francisco?
For a typical $1,063,000 purchase: $212,600 down (20%) plus ~3% closing costs ≈ $244,490 cash, and an all-in carrying cost of $8,126/month – comfortably supported by $24,623+/month of net income.
What is the price-to-rent ratio in San Francisco?
About 24 ($1,063,000 ÷ $44,400 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%, 0.75% 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 ~$541/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.
More on San Francisco
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