Renting vs. Buying a Home in 2026: Which Is More Affordable?

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There’s an age-old debate about whether owning or renting a home is cheaper. When you factor in your hierarchy of needs, it doesn’t make much sense to spend all of your money on shelter if it means you won’t be able to afford food. Whether it’s paying rent each month or figuring out a mortgage payment, there’s no way around the fact that either option comes with quite a few costs to consider.

With 2026 around the corner, and as housing costs, mortgage rates and rental prices continue to fluctuate, it may be time to ask if renting or buying a home will be cheaper. Owning a home often comes with higher upfront costs and long-term financial commitments. While renting can seem more affordable initially, rising rents payments and added fees can quickly change the equation.

If you’re debating whether to buy or rent a home this year, here are some things to consider.

Renting a Home in 2026 Is Likely Going To Be Cheaper

According to Apartment List’s December National Rent Report, national rent prices are down 1.1% year-over-year. This is likely due to the supply and demand factor easing up, thanks to a rise in vacancy rates that put renters in a stronger financial position. 

However, it may not be time to celebrate just yet as the national average rent is still expected to increase in 2026. Though specific average rental prices for 2026 are not yet available, the current national averages are around $1,631 for a one-bedroom apartment and $1,887 for a two-bedroom apartment.

Yet that’s nothing in comparison to the significant increase in existing home sales that is anticipated, with some forecasts predicting a double-digit percentage jump, which would put a much bigger dent in your savings. Not that this should come as a shock, but home prices are expected to continue climbing, though at a more moderate pace than in recent years. The National Association of Realtors (NAR) even predict a national price increase of about 4%. 

Cost of Buying a Home in the US

Mortgages themselves can bring on a scary amount of debt, especially when you factor in the interest rate. Thankfully, mortgage interest rates in the U.S. are expected to fall in 2026. According to recent reporting from NAR, the average 30-year mortgage rate is projected to drop to around 6%, which is a decline from the 2025 average of 6.7%.

However, a shortage of homes on the market is expected to continue, which will help keep home prices from falling significantly. According to Zillow, the average home value in the U.S. as of Dec. 3, 2025, is about $360,727, which is up 0.1% over the past year.

While the housing market has had its ups and downs, home prices tend to rise over time. The same can be said for most rental markets, but the difference is that homeownership comes with more costs than rent. Things like property taxes, maintenance, insurance and homeowners’ association (HOA) fees can add up quickly.

When buying a home, you should also be prepared to pay certain upfront fees that don’t come with a rental. Here are some of the most common expenses, according to the U.S. Department of Housing and Urban Development:

• Closing costs: Closing costs are typically 3% to 4% of your home purchase price. If your home costs $400,000, that means you can expect to pay $12,000 to $16,000 upfront in closing fees. This typically covers things like appraisal fees, tax service and title fees, certain taxes and prepaid expenses like homeowners’ insurance and property taxes.
• Down payment: The minimum required down payment depends on a few factors, including the mortgage loan type. Putting at least 20% down can help you avoid private mortgage insurance, which is an additional monthly expense. Most loans still require a down payment of 3.5% or more of the home purchase price. The higher the down payment amount, the less you need in financing — and the lower your monthly and overall interest charges tend to be.
• Interest rates: If you decide to get a mortgage loan, you’ll also have to pay interest. Freddie Mac found that as of November 2025, the average interest rate for a 30-year fixed rate mortgage is 6.23%, which the average for a 15-year fixed rate mortgage is 5.51%.

Cost of Renting a Home in the US

Of course, you’ll still have to pay for certain things as a renter, too. Many landlords require a deposit which, depending on the property and your credit score, could be quite high — often at least one full month’s rent upfront, if not more. You may also have to pay for things like trash service, reserved parking, pet rent and a whole host of other small fees.

Some renters have to pay certain “junk fees” that increase the overall cost. This could include repeat application fees that, over the course of searching for a rental property, can end up being hundreds of dollars. Junk fees may also include things like mail sorting or “January fees,” which are charged at the start of the new year.

While you won’t have interest to worry about, rent can still add up. Say you rent an apartment for 30 years. Assuming you pay $2,000 a month and the rent never changes, you’d pay $720,000 in total rent payments. This doesn’t include any additional or junk fees, and you also won’t build equity.

Final Take To GO: Weighing Your Options

Ultimately, renting might be the cheaper option in the 2026 housing market, even if it doesn’t seem like it at first. That said, you might also want to look beyond the numbers.

Renting a home can be beneficial if you’re not ready to settle down yet or you’re unprepared for the upfront and ongoing costs of homeownership. However, buying a home gives you the chance to build equity without the fear of rent hikes. You might still have to deal with increasing property taxes and insurance premiums, so be sure to budget those in.

Angela Mae contributed to the reporting for this article.

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