Renting vs. Owning a Home in 2016: Which Was Cheaper?

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If you’re considering renting or buying in 2026, current prices might shock your budget. While RentCafe reported an average monthly rent of $1,741, AmeriSave estimated an average mortgage payment of $2,329. 

Comparing these numbers to 2016 prices offers some interesting insights into the housing market and whether renting or buying was smarter a decade ago.

How Much Did Renting Cost?

According to RentCafe’s 2016 year-end report, the average U.S. apartment renter paid $1,210 per month, which is about $1,630 in 2026 dollars using the CPI inflation calculator.

The report also showed that rent payments varied widely. For example, the average Los Angeles renter paid a whopping $2,169 ($2,922 in 2026 dollars), while a Detroit renter paid $932 ($1,256 in 2026 dollars). Additionally, steep rent increases, sometimes in the double digits, weren’t uncommon.

However, like today, renters benefited from lower additional costs versus homeowners. While it was common to put down one or two months’ rent for a security deposit and pay modest amounts for the application fee and renters insurance premium, landlords covered costly maintenance and repair costs.

What Were Homeownership Costs Like?

Freddie Mac data showed that the national average 30-year fixed mortgage rate was 4.32% in late December 2016, notably lower than the current 6% average rate. Plus, the U.S. Census Bureau and U.S. Department of Housing and Urban Development showed a national average home price of $364,900 ($491,600 in 2026 dollars).

Assuming a 20% down payment ($72,980) and 4.32% mortgage rate, the monthly principal and interest on a 30-year fixed mortgage for the average home would’ve cost around $1,448 ($1,951 in 2026 dollars), based on this mortgage calculator. With a smaller down payment, your mortgage payment would have increased and possibly included mortgage insurance.

Buyers also faced additional costs, such as:

• Property taxes: While they varied by location, property taxes averaged $3,296 annually ($4,440 in 2026 dollars), according to ATTOM Data Solutions.
• Homeowners insurance: The National Association of Insurance Commissioners noted that homeowners paid an average annual premium of $1,192 ($1,606 in 2026 dollars).
• Maintenance and repairs: A rule of thumb is to expect to spend 1% of your home’s price each year on them; that would have totaled $3,649 based on the average 2016 home price ($4,916 in 2026 dollars).
• Closing costs: These typically run 2% to 5% of your loan amount, adding several thousand dollars to your upfront costs.

So, Which Was Cheaper in 2016?

These national averages suggest that renting was generally cheaper in 2016, especially when you consider the differences between mortgage and rent payments and the extra expenses homeowners faced. However, the answer ultimately depended on the local market and the person’s situation.

An October 2016 Trulia report suggested buyers actually came out ahead in many markets, with 37.7% cheaper costs than renters’, assuming they put 20% down and stayed in the home for seven years. Plus, even if renting was cheaper initially, homeowners enjoyed more stable housing payments and could build equity.

If you’re considering this decision today, run the numbers through a rent-versus-buy calculator.

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