In this month’s real estate column, local realtor Shelley Sakala responds to a reader’s question pertaining to renting versus buying. “I’ve been waiting for home prices to cool off, but now mortgage rates have taken off. At this point am I better off renting instead of buying?” asks Eric, a Phoenix resident.

If your goal is to find the most affordable option without having to leave the area, renting may be the more cost-effective choice – in the short term. Here’s why…

When you buy a home, you take on significant upfront costs such as closing costs and your down payment. Renters don’t have these expenses. Renters also don’t have to worry about ongoing costs of maintenance, mortgage insurance, HOA fees, or repairs. Renters will never have to pay to replace the AC unit or major appliances. Seems like the advantage is in renting, right? Not so fast…

The costs of home ownership are offset by the hefty tax breaks you receive. Plus, homeowners have an advantage when it comes to long-term affordability. With a traditional fixed rate loan, your monthly mortgage payment stays the same for the life of the loan. Rent, on the other hand, will go up. Guaranteed. Maybe not every year, but over the course of a decade or longer, rents will continue to rise. Homeowners get to lock-in their housing costs, while renters pay the prevailing market rate.

So, what’s the answer?
It’s usually cheaper to rent for the first five to six years. After that, as rents continue to rise, it’s the homeowners who are the ones saving money on housing costs. Using an actual example, let’s look at a typical scenario for North Phoenix.
Median Home Price: $695,000

Year 1: $2,844 $7,495
Year 2: $2,921 $4,789
Year 3: $3,000 $3,921
Year 4: $3,081 $3,513
Year 5: $3,164 $3,289
Year 6: $3,249 $3,159
Year 7: $3,337 $3,083
Year 8: $3,428 $3,041
Year 9: $3,521 $3,022
Year 10: $3,616 $3,020
Year 15: $4,134 $3,156
Year 20: $4,720 $3,427
It’s obvious which option is cheaper at first. But once you hit the six-year mark, the rising rents will exceed the monthly costs of home ownership.

Because everyone’s individual situation varies, you can run an easy custom calculation using the Rent or Buy Calculator at

Once you’ve crunched the numbers, you’ll be able to see which scenario saves you the most money as you’re living your best life.



Shelley Sakala is a local realtor and owner of The Sakala Group Real Estate. Learn more at