History test, buy versus rent

Years you stay before selling. The typical owner stays 11 years (National Association of Realtors, 2025).

Price of the home today. The median existing home was US$396,800 in January 2026 (National Association of Realtors). Earlier years follow the Case-Shiller index.

Rent a month of the home you would rent instead. The typical US rent was US$1,962 in July 2026 (Zillow), mostly apartments. Earlier years follow the Bureau of Labor Statistics rent index.

Share in stocks. S&P 500 with dividends. Reset every year. Whoever pays less each year invests the difference.

Share in bonds. 10-year Treasury bonds. The rest is in 3-month Treasury bills.

Taken off returns each year. Fees and tax on the investments.

Down payment. Under 20% adds mortgage insurance.

State. Sets the property tax to that state’s median rate (Census, 2024).

Buying costs. Of the price: title, lender fees, points.

Selling costs. Of the sale price: agents, transfer taxes.

Every start year. Home price in the dollars of that year; wealth in 2026 dollars, at the end of the stay, with the owner selling and paying off the loan.

Buying and renting, side by side. Each year the owner pays the loan, property tax, insurance (0.5% of the value), upkeep (1.5%) and any mortgage insurance; the renter pays rent and renter’s insurance (US$180 in 2026 dollars). Whoever pays less invests the difference. No income tax: the years run back to 1971, and the 2026 tax rules do not apply to them.