When it’s advantageous to rent rather than buy

August 2, 2026 15

Real estate prices skyrocketed in recent years, and property values have remained high in many markets ever since. Conventional wisdom has long attested to the value of investing in real estate, but a significant percentage of hopeful homeowners may be struggling to find an affordable property in the current market. That’s led some to question conventional wisdom and look to renting as more than just a temporary pitstop on the road to homeownership.

According to Hannah Jones, a senior economic research analyst at Realtor.com, many early- and mid-career workers are finding the prospect of purchasing a home out of reach. While the percentage of 18- to 44-year-olds living with their parents has risen by nearly 3 percent since the four years between 2010 and 2014, scores of young professionals are looking to renting as well. Renting has long been characterized as a short-term solution, but there are situations when it’s advantageous to sign a lease.

Buying would bust a budget

Buying a home is more expensive than ever, but the cost of homeownership extends beyond the mortgage. Mortgage calculators are useful tools when estimating a monthly mortgage payment. That only paints part of the picture in relation to the costs of owning a home. Single-family homes tend to be larger than rented apartments, and that extra space means higher utility bills. According to the U.S. Energy Information Administration (EIA), the national average price for electricity increased by 7.4 percent between 2024 and 2025.

Property taxes are another notable variable to consider, as Rocket Mortgage notes, they can increase the monthly cost of homeownership by hundreds of dollars, if not more. If the monthly mortgage payment itself is stretching your budget, then that budget is likely to be busted by utility bills, property taxes, and the predictable and less predictable maintenance expenditures associated with homeownership.

Rent payments help to steady your expenses

While many suspected the real estate market would become more affordable after prices skyrocketed in the early 2020s, that has not happened. According to the National Association of Home Builders, house prices across the United States increased by 55 percent between the first quarter of 2020 and the third quarter of 2025. Even if that increase levels off rather than rises in the coming years, early- to mid-career workers may not benefit by trying to wait out the market.

While landlords have the right to increase rent at the end of each lease. Historically, rents do not increase by all that much year-to-year. According to IPropertyManagement, the average monthly rent increased by 70 percent between 2020 and 2026. However, the average change between 2025 and 2026 was less than 3 percent.

While rents have increased over the last half-decade, the relatively low year-to-year increase, coupled with the lower utility bills and lack of property taxes, can allow early- and mid-career professionals to steady their monthly housing expenses in a time marked by a rising cost of living.

Professional opportunity knocks

Renting also makes sense when early- and mid-career professionals are presented with career opportunities in new locales. Even professionals who have been saving up in the hopes of buying a home in their current towns or cities may find it financially advantageous, and professionally fulfilling, to pursue new professional opportunities elsewhere. A higher salary can certainly help to bridge the gap between wages and higher home costs, and a relocation to a more affordable rental and ownership market may help professionals save more and build a bigger nest egg to buy their own home down the road.

Rising home costs have garnered considerable attention in recent years. While that might leave some people feeling priced out of the real estate market, there are many instances when it’s advantageous to rent.