4 Questions To Ask Before You Decide Whether To Rent or Buy in 2026
If you plan to move in 2026, one of your biggest decisions will be whether to rent or buy.
There’s a lot to consider on both sides of the equation – and certain questions you’ll need to ask yourself. Here are four of the most important questions to ask before you decide.
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Which Can Save the Most Money?
If cost is a big consideration, then you’ll want to know whether it’s cheaper to rent or buy. From a national perspective, you’ll probably save more money renting.
During the 2025 fourth quarter, the typical U.S. mortgage holder’s monthly payment topped $2,000 for the first time to hit a national average of $2,005, according to Realtor.com. That cost has continued to rise in 2026.
In contrast, rents are trending lower. Separate research from Realtor.com found that the median asking rent in the 50 largest metros was $1,673 per month as of April 2026. That was down 1.7% from the previous year. Rents declined across all size categories, from studios to two-bedroom units.
Which Markets Are You Looking At?
National figures provide a good backdrop when weighing whether to rent or buy, but they don’t tell the whole story. More important is where you plan to live.
A recent report from Empower analyzed Zillow data to determine where buying is cheaper than renting, and vice versa.
Here are five major metros where it’s cheaper to buy than rent, as of January 2026.
Rank | Metro | Monthly mortgage (principal and interest) | Median rent | Monthly savings (rent minus mortgage) |
1 | Chicago | $1,613 | $2,091 | $478 |
2 | Miami | $2,244 | $2,645 | $401 |
3 | Pittsburgh | $1,049 | $1,449 | $400 |
4 | New Orleans | $1,218 | $1,568 | $350 |
5 | Tampa, Florida | $1,693 | $1,986 | $293 |
Here are five metros where it’s cheaper to rent than buy.
Rank | Metro | Monthly mortgage (principal and interest) | Median rent | Monthly savings (mortgage minus rent) |
1 | San Jose, California | $7,500 | $3,406 | $4,094 |
2 | San Francisco | $5,242 | $3,064 | $2,178 |
3 | Los Angeles | $4,538 | $2,885 | $1,653 |
4 | San Diego | $4,345 | $2,871 | $1,474 |
5 | Seattle | $3,511 | $2,183 | $1,328 |
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Are You Financially Ready To Buy?
Regardless of whether you rent or buy, you can expect to pay money upfront before moving in. As a general rule, rental deposits are much less expensive than down payments on home purchases.
The average U.S. home sold for $514,600 during the first quarter of 2026, according to the Federal Reserve Bank of St. Louis (FRED). Even if your down payment is only 5% of the purchase price, it will still cost you $25,730 – and that doesn’t include other expenses such as closing costs, property taxes and homeowners insurance.
As Travelers Insurance noted, if you have a lot of other financial obligations to deal with right now, you might need to “get your finances in order” before buying a house.
But if you’re in a strong financial position, with minimal debts and considerable savings, buying now can help you build home equity that could strengthen your position even more in the future.
What’s the Current Mortgage Rate? (And Should It Matter?)
Mortgage rates have fallen considerably from their 2020s peak of 7.76% in late 2023. But they’re still high compared with five, 10 or 15 years ago.
The average 30-day fixed rate mortgage was 6.53% as of May 28, according to FRED. That’s well above the decade low of 2.65%, set in late 2020.
Buying a home when rates are high means you’ll be locked into expensive borrowing costs for at least a few years. That doesn’t necessarily mean you should wait for rates to tumble before buying a home, however.
“A common misconception is that buyers must wait for the ideal combination of lower rates and perfect market conditions before moving forward,” said Karl Benjamin, executive vice president of third party origination at Cardinal Financial. “In reality … buyers are no longer waiting for perfect timing or the lowest possible rate. They are using strategic loan structures to move forward with confidence.”
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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