Buying vs. renting has turned into a math problem.

The Wall Street Journal analyzed rent and home-buying cost estimates from mortgage-finance startup Tomo and found that in the current market, home buyers will need to wait longer for their investments to pay off than they would have before the pandemic. 

The article noted that not only were home prices up (20.9% in March year over year), as were interest rates for 30-year fixed-rate mortgages (up to an average of 5.27% in May), but rents are also up around the country. 

Rent for a single-family home rose 13.1% in February year over year, according to housing data firm CoreLogic.

But the increased cost to buy a home means that the time it takes to break even, compared with what one would pay to rent a comparable house, is longer now, according to the article.

In 19 of 20 markets used for the Tomo and WSJ analysis, the estimated time to break even on a home purchase has increased, with breaking even defined as when the estimated net costs of having owned that home match the estimated costs of having rented a typical home over the same period.

The 20 markets analyzed range from Boston to Las Vegas. The analysis used a number of assumptions including down payment amount, mortgage rate activity and, perhaps the biggest assumption—that annual rents and home-price growth will both revert to “historical levels.”

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