Rent vs. Buy: A Framework That Still Works at 7%

Where the market is right now

A quick snapshot, as of late summer 2026:

• Mortgage rates. The average 30-year fixed mortgage rate was 7.03% on September 24, according to Freddie Mac.
• Home prices. Florida's median home sale price was about $383,400 in August, up about 0.9% from a year earlier, according to Redfin. In Orlando, the median sale price over three months was about $416,000, slightly lower than a year earlier.
• Rents. The national median rent was about $1,390 a month in August, down about 0.8% from a year earlier, according to Apartment List. In Orlando, the median across apartment sizes was about $1,529, with rents down about 1.5% from a year earlier.

In some Florida markets, rents have been flat or falling as new apartments come online. In Tampa, for example, a wave of new supply pushed vacancy to around 10%, giving renters more negotiating room than they've had in years.

That combination, higher mortgage rates, softer prices in some areas, and flat rents, is exactly why a clear framework matters right now.

Why "renting is throwing money away" isn't quite right

This is the most common argument for buying, so let's deal with it first.

When you rent, your payment goes to your landlord, and you don't build equity. That's true.

But a lot of what a homeowner pays doesn't build equity either:

• Mortgage interest. In the early years of a mortgage, most of your payment is interest.
• Property taxes.
• Homeowners insurance, which in Florida can be expensive.
• Maintenance and repairs.
• HOA or condo fees.

None of those build wealth. They're the cost of living in a home you own, the same way rent is the cost of living in a home you don't.

In plain terms: both renters and owners pay for the right to live somewhere. The real comparison is between the costs that don't build wealth on each side.

What renting really costs

Renting has a relatively simple cost structure:

• Monthly rent
• Renters insurance, which is usually inexpensive
• Utilities, which may or may not be included
• Potential rent increases at renewal
• Moving costs if you relocate

What renting gives you:

• Flexibility. You can move for a job, a relationship, or a better neighborhood without selling a house.
• Predictability for repairs. When the AC dies, it's usually the landlord's problem.
• Money freed up. You don't need a down payment or closing costs, so that money can be saved or invested.

What renting doesn't give you:

• Control over rent increases
• Equity in a home
• Freedom to renovate or change the property
• Protection from being asked to move when a lease ends

What owning really costs

Owning has more moving parts:

• Principal and interest on your mortgage
• Property taxes
• Homeowners insurance, plus flood insurance if needed
• HOA or condo fees, if applicable
• Maintenance and repairs. A common rule of thumb is to budget about 1% of the home's value per year, sometimes more for older homes
• Private mortgage insurance if you put down less than 20% on a conventional loan
• Closing costs when you buy
• Selling costs, often including agent commissions, when you sell
• Opportunity cost of your down payment, meaning what that money could have earned if invested elsewhere

What owning gives you:

• Equity as you pay down the loan and if the home rises in value
• A fixed payment on principal and interest with a fixed-rate mortgage
• Control over your home
• Stability and roots in a community
• Potential tax benefits, though fewer people itemize than in the past

What owning doesn't give you:

• Easy flexibility to move
• Protection from rising taxes, insurance, and repair costs
• Guaranteed appreciation

A worked example in Central Florida

Numbers make this real. Here's a simplified, hypothetical comparison using today's figures. The assumptions are illustrations, not predictions, and your numbers will be different.

Buying: A home priced at $416,000, close to Orlando's recent median, with 20% down and a 30-year fixed mortgage at 7.03%.

Upfront, that purchase requires an $83,200 down payment plus closing costs. If closing costs ran around 3%, that's roughly another $12,500, for about $95,700 in cash.

Renting: A comparable single-family home in the area renting for a hypothetical $2,000 a month, plus renters insurance.

At first glance, owning costs about $1,300 more per month. But that's not the full picture.

What the owner builds. In the first year, about $3,361 of the mortgage payments would go toward principal, which builds equity. About $23,289 would go to interest. Principal paydown speeds up over time, and if the home rises in value, the owner builds equity that way too. If it falls, the owner can lose equity.

What the renter keeps. The renter didn't spend $95,700 upfront. If that money earned, say, 4% in a safe account, that's roughly $319 a month in interest. Plus the renter has the monthly difference in cost available to save or invest.

So the real question becomes: will the owner's equity growth, through principal paydown and possible appreciation, outpace the renter's savings and investment growth, after all the costs of buying and selling?

That depends on how long you stay, what happens to home prices and rents, and whether the renter actually saves and invests the difference. That last point matters more than people think. The math only favors renting if the money saved actually gets saved.

The questions that usually decide it

Instead of trying to predict home prices, work through these questions.

1. How long will you stay?

This is often the single most important factor.

Buying and selling a home are expensive. Closing costs on the way in, and selling costs on the way out, can add up to a meaningful percentage of the home's value. If you stay a long time, those costs get spread over many years. If you move in two or three years, they can wipe out any benefit of owning.

A common rule of thumb is that buying tends to make more sense the longer you plan to stay, often five years or more. It's a starting point, not a law.

2. What's the full monthly cost, and can you afford it comfortably?

Compare the full cost of owning, not just the mortgage, to the full cost of renting. In Florida especially, insurance, taxes, and HOA fees can change the math a lot.

Then ask whether the full cost fits your budget with room to spare, not just barely.

3. What happens to your cushion after closing?

A lot of people put everything into the down payment and closing costs, then move into a house with no savings left. Then the AC fails in July or the roof needs work.

A strong emergency fund after closing is one of the best predictors of whether owning goes well. If buying would wipe out your cushion, it may be worth waiting.

4. How stable is your income and your life?

If your job, relationship, or location might change in the next few years, renting's flexibility is worth a lot. If your life is settled and you expect to stay put, owning's stability can be worth a lot.

5. Can you afford it at today's rate?

It's tempting to buy now and plan to refinance when rates drop. That can work, but it depends on rates actually falling, your credit and income still qualifying, and your home holding its value. Plan around the payment you'd have at today's rate. Treat a future refinance as a bonus, not a plan.

6. What does owning mean to you?

Money isn't the only factor. For some people, owning a home means stability, a place to raise kids, freedom to renovate, and a sense of permanence that's worth paying for. For others, renting means freedom, less responsibility, and money available for other goals. Neither is wrong.

Florida-specific considerations

A few things make the rent-vs-buy decision different here.

Insurance. Florida homeowners insurance has been among the most expensive in the country, and hurricane deductibles are often a percentage of your home's value. Some carriers have filed for rate decreases recently, but insurance is still a major part of the cost of owning.

Flood risk. Standard homeowners policies generally don't cover flood damage. Depending on where you buy, flood insurance may be required or strongly worth considering.

Condos. Condo buyers face HOA fees and, in some older buildings, special assessments tied to structural safety requirements and insurance costs. Weak demand for condos has been one of the main reasons Florida prices have been softer than the national market.

Property taxes and the homestead exemption. Florida's homestead exemption and Save Our Homes cap can lower taxes for primary residences over time. And Amendment 3, on the November 3 ballot, would change the homestead exemption for non-school taxes if voters approve it. Whatever happens, property taxes are part of the full cost of owning.

No state income tax. Florida doesn't have a state income tax, which is part of what draws people here and keeps demand for housing strong in many areas.

If you rent: how to make renting work for you

Renting can be a smart financial choice, but only if you use its advantages.

Negotiate at renewal. In markets where new apartments are coming online and vacancy is up, landlords may be more willing to hold rent flat or offer concessions to keep a good tenant. It doesn't hurt to ask, especially if you've paid on time.

Actually save the difference. The financial case for renting depends on doing something useful with the money you're not spending on a down payment, closing costs, and ownership expenses. Automating a monthly transfer to savings or investments turns that advantage into something real.

Build your down payment fund if you plan to buy later. If owning is a future goal, renting now can be a chance to build a strong down payment and a solid emergency fund at the same time.

Get renters insurance. It's usually inexpensive and protects your belongings and liability. Your landlord's insurance generally doesn't cover your things.

Read your lease carefully. Know the renewal terms, notice periods, and what happens if you need to leave early.

If you buy: how to buy well

If the numbers and your life point toward buying, a few steps can make a big difference.

Get your credit in order first. A stronger credit score can mean a lower mortgage rate. Check your reports for errors months before you apply.

Shop several lenders. Rates and fees vary more than people expect. Getting quotes from at least three lenders on the same day lets you compare fairly.

Understand points and buydowns. Paying upfront to lower your rate can make sense if you'll keep the loan long enough to break even. Ask for the break-even point in months.

Don't skip the inspection. In Florida especially, the roof, the air conditioning system, plumbing, and signs of water damage can be expensive surprises. An inspection is cheap compared to what it can catch.

Get insurance quotes before you commit. Homeowners and flood insurance costs vary a lot by property. Knowing the real number before you make an offer can change your decision.

Keep reserves after closing. Plan to have a real cushion left after the down payment and closing costs, so the first repair doesn't go on a credit card.

For public employees

A few points specific to many of the people I work with.

Stability can favor owning. Many public employees stay in one area for a long time, which spreads out the costs of buying and selling. That can make owning more attractive.

Plan around base pay. If you're a first responder who works a lot of overtime, it's worth making sure a mortgage fits your budget on base pay alone, since overtime can change.

Think about retirement. If you're getting close to retirement, the rent-vs-buy question often becomes a downsize-or-stay question. Paying off a mortgage before retirement, moving somewhere smaller, or even renting in retirement are all real options with different trade-offs.

Don't raid retirement accounts for a down payment without thinking it through. Borrowing from or withdrawing retirement money can mean taxes, penalties, and lost growth. It's worth running the numbers first.

What I'm not going to do

I'm not going to tell you whether to rent or buy. I'm also not going to tell you home prices will rise or fall, or when mortgage rates will come down. Nobody knows that.

What I will say is this. When it comes down to it, the best time to buy isn't when the market is perfect. It's when the numbers work for your life, you plan to stay long enough, and you'll still have a cushion after closing. And the best time to rent is whenever those things aren't true yet.

Let's run your numbers

The rent-vs-buy decision is really a whole-plan decision. It affects your savings, your debt, your emergency fund, your retirement contributions, and your flexibility for years.

If you're weighing a purchase, thinking about downsizing, or wondering whether renting makes more sense for you right now, I can help you see the full picture. We'll compare the real costs of each option using your numbers, look at how a home purchase would affect the rest of your plan, and make sure whatever you decide leaves you on solid ground.

I work as a fiduciary, which means I'm required to act in your best interest. I'm not a real estate agent or a mortgage lender, and I don't earn anything from whether you buy.

The right home decision isn't about the market. It's about your plan.

Frequently asked questions

Is it better to rent or buy in 2026?

It depends on how long you plan to stay, the full cost of owning compared to renting in your area, your emergency savings after closing, and your income stability. With mortgage rates around 7%, running the numbers for your specific situation matters more than ever.

Is renting throwing money away?

Not exactly. Renters pay for housing, but homeowners also pay costs that don't build equity, including mortgage interest, property taxes, insurance, and maintenance. The real comparison is between those non-equity costs on each side.

How long should I plan to stay to make buying worth it?

A common rule of thumb is five years or more, because buying and selling costs need time to be offset. The right number depends on your local market and your costs.

How much should I budget for home maintenance?

A common rule of thumb is about 1% of the home's value per year, and often more for older homes.

What are home prices and rents doing in Florida?

In August 2026, Florida's median home sale price was about $383,400, up about 0.9% from a year earlier, per Redfin. Orlando's median sale price was about $416,000, slightly lower than a year earlier. Orlando's median rent was about $1,529, down about 1.5% from a year earlier, per Apartment List.

Educational content only. Not individualized investment, tax, legal, lending, or real estate advice. Examples are hypothetical, use stated assumptions, and are for illustration only. Joy Financial Group LLC is not a real estate broker or mortgage lender. Benowitz Wealth Management is a brand of Joy Financial Group LLC, a Florida state-registered investment adviser.

Neither Joy Financial Group LLC nor Benowitz Wealth Management is affiliated with, endorsed by, or employed by the Florida Retirement System, the Florida Division of Retirement, the State Board of Administration of Florida, MyFRS, or any government agency. FRS members may obtain free, unbiased guidance from the MyFRS Financial Guidance Line at 1-866-446-9377.