Renting Feels Cheaper—But Is It Costing You More?

At first glance, renting in 2025 might seem like the smarter financial move. In fact, in many U.S. cities, monthly rent can be up to $900 less than the cost of buying a starter home. That gap feels significant—especially when you're budgeting every dollar.

But according to Melanie Bundy, what most people overlook is that rent is essentially 100% interest. “Every dollar you spend on rent is gone forever. You’re not building any equity, you don’t get tax deductions, and there’s no long-term financial return,” she explains.

What You’re Really Paying For When You Buy

When you buy a home, your upfront monthly costs may be higher—but part of that payment is going back into your own pocket in the form of equity. That’s wealth you can tap into later, whether through a sale, refinance, or home equity loan.

Plus, homeowners benefit from potential tax deductions and long-term appreciation. “Owning a home helps create financial stability,” says Melanie Bundy. “You’re locking in your housing cost for the future while building an asset.”

Today’s Mortgage Rate Isn’t Forever

A common hesitation buyers have in 2025 is locking in a mortgage rate they feel is too high. But here’s the key: buying a home doesn’t mean you’re stuck with today’s rate forever.

“You can refinance when rates go down,” Melanie shares on thebundyteam.com/home. “But rent? It’s almost guaranteed to increase year after year.” That means what looks like a cheaper option today may not stay that way for long.

The Five-Year Future: Rent vs. Buy

Let’s zoom out. Imagine where you’ll be five years from now:

• If you rent: You’ve spent tens of thousands on housing, with zero return. Your rent has likely gone up, and you’re no closer to ownership.

• If you buy: You’ve built equity, potentially gained appreciation, and may have had the chance to refinance to a better rate.

Melanie Bundy puts it simply: “It’s not just about what’s cheaper this month. It’s about where you want to be financially in a few years—and how to get there.”

Can You Afford to Buy in 2025?

You don’t need to be rich to buy a home—you just need a plan. The key is knowing what’s truly possible based on your current income, debts, and savings.

If you’re wondering whether you should keep renting or if buying is within reach, Melanie offers personalized guidance. “Let’s run the numbers together,” she says. “You might be closer than you think.”

Sources: Realtor.com, Forbes.com, FreddieMac.com, NAR.realtor