Renting vs. Buying: What's the Trade-off Now vs. 10 Years Ago
The housing landscape looks awfully different today than a decade ago.
How has the rent-versus-buy decision changed over the last 10 years? Find out below.
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Incomes vs. Rents and Home Prices
The ratio of household incomes to home prices has climbed uncomfortably high over the past decade. Harvard's Joint Center for Housing Studies charted it over time and found that home prices cost around four times median incomes in 2014 to 2016, but rose to five times in 2024 (the most recent data available).
Meanwhile, rents have actually fallen over the last few years. The February 2026 Realtor.com monthly rent report showed rents falling to a four-year low and as of October 2025 rents make up a lower percentage of household income (23.4%), also per Realtor.com.
Richard Ross, CEO of Quinn Residences, analyzed data showing that renting saves an average of $112,758 over a ten-year span. "Renters pay 37.5% less in total housing costs over a 10-year occupancy period," Ross explained.
Interest Rates Drag on Affordability
A decade ago, 30-year fixed mortgage rates averaged 3.58% according to the Federal Reserve. Today they average 6.37%.
That makes a huge difference in affordability. A $400,000 loan at 3.58% costs $1,814 in principal and interest. The same loan at 6.37% costs $2,494.
"Currently renting is cheaper than buying starter homes in all 50 of the largest U.S. metros," said Sain Rhodes, real estate expert with Clever Offers.
Mortgage Interest Deduction Less Valuable
In 2016, the standard deduction was $6,300 for single filers ($12,600 for married couples).
By 2026, the standard deduction rose to $16,100 for single files, and $32,200 for married couples.
The upshot: far fewer Americans itemize their deductions. The Tax Policy Center found that after the Tax Cuts and Jobs Act of 2017 raised the standard deduction, the percentage of taxpayers who itemized dropped from 31% to 10%.
SALT Deduction Cap
The same law also restricted federal write-offs for state and local taxes (SALT) to $10,000, further reducing homeownership tax breaks. The One Big Beautiful Bill Act (OBBBA) temporarily raised that limit to $40,000 for tax years 2025 to 2029.
Even so, it puts further limits on tax breaks for homeowners, especially in high-tax states.
All in all, homeownership came with far clearer benefits a decade ago. Renting looks increasingly tempting for many Americans, as rents dip but home prices and mortgage rates remain stiflingly high.
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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