Why Buying a Home Still Pays Off in the Long Run

Renting might seem cheaper and far more convenient than buying a home—especially in today’s market. No repairs to worry about, no property taxes, no dealing with fluctuating mortgage rates. You simply pay your rent and move on.

But here’s what often gets overlooked: renting does nothing to grow your financial future. Homeownership, on the other hand, increases your net worth year after year.

If you’ve been wondering whether buying is still worth it, the long-term numbers make the answer clearer than you might expect.

Renting vs. Owning: What Really Happens to Your Money

One of the biggest differences between renting and owning is where your monthly payment goes. When you rent, your money disappears into someone else’s pocket. When you own a home, part of your payment builds equity—wealth that grows as your home appreciates and your mortgage balance goes down.

So while renting might feel more affordable in the moment, it comes with a long-term cost: missed wealth-building potential. And that loss is bigger than many people realize.

First American recently examined the long-term financial outcomes of renting versus owning. They compared mortgage payments, property taxes, insurance, repairs, and maintenance with the equity gained through home appreciation and mortgage payoff—across several key time periods:

• 2006: at the start of the housing bubble

• 2015: ten years ago

• 2019: pre-pandemic, the last “normal” market

• 2022: when mortgage rates spiked

  
  

Across every time frame, two things were consistently true:Renters lost money over time. Homeowners gained it.

In the analysis, each time period showed buyers’ net worth rising steadily (represented by solid lines), while renters’ financial position declined over time (shown with dashed lines). In short:Time spent owning a home builds wealth. Time spent renting doesn’t.

Even after accounting for maintenance, taxes, and insurance, homeowners still came out ahead in every scenario First American reviewed. Renters, meanwhile, spent money with no long-term return—regardless of the time frame.

This doesn’t mean buying is always cheaper upfront. But the longer you stay in a home, the larger the wealth gap becomes between owners and renters.

Affordability Is Slowly Improving

You might be thinking, “That all sounds great, but buying still feels out of reach.”Understandable.

The last few years have been challenging for buyers. But the landscape is beginning to shift. Mortgage rates have eased, price growth has moderated, and incomes have risen. Zillow even reports that typical monthly payments have become slightly more manageable compared to this time last year—not a huge drop, but enough to help.

Buying may not be easy today—but it’s becoming more attainable than it was just a few months ago. And historically, the long-term payoff has always been worth it.

Bottom Line

Renting may feel cheaper right now, but owning a home is what helps build real, lasting wealth. And with affordability starting to improve, your path to homeownership might be more within reach than you think.

If you’d like to explore what buying could look like for your situation, let’s connect. No pressure—just real guidance to help you plan your next move.