The average first-time homebuyer is 40 years old, according to the National Association of Realtors. That said, you shouldn’t rule out homeownership if you’re in your 20s — you may already be in a position to buy.

Before making that decision, it helps to understand where the housing market stands and the affordability factors involved beyond the monthly mortgage payment.

Up Next: 4 Affordable Cities Where $3,000 a Month Covers Rent, Food and Entertainment

Trending Now: 9 Subtly Genius Things All Wealthy People Do With Their Money — That You Should Do, Too

Here’s what to know about the cost of buying versus renting — and which may be cheaper in 2026.

Housing Costs Are on the Rise

The cost of owning a home is rising, but renting is getting more expensive too. If you’re weighing your options, start by comparing monthly costs. According to the 2020–24 American Community Survey, renters pay a median of $1,413 per month — about $100 higher than the previous five-year period (2015–19).

RentCafe estimates the average rent even higher, at $1,750 per month for a 908-square-foot apartment.

For homeowners, the U.S. Census Bureau reports a median monthly mortgage payment of $2,225 for those who moved in 2024. By comparison, the median payment was $1,797 just a few years earlier — roughly in line with today’s average rent.

Based on monthly payments alone, renting is usually cheaper than buying.

Costs Vary by Location

Housing costs vary significantly depending on location. According to the Census Bureau, recent gross monthly rents (including utilities) in select counties include:

• Arlington, Va. — $2,322

• Park County, Colo. — $2,161

• Honolulu, Hawaii — $2,083

• Montgomery County, Md. — $2,068

• Orange County, Fla. — $1,775

• Lee County, Fla. — $1,712

• Dawson County, Ga. — $1,626

• Ada County, Idaho — $1,577

In contrast, some of the lowest rents are:

• Chowan County, N.C. — $681

• Calhoun County, W.Va. — $473

• Greene County, Ala. — $432

At the state level, rents tend to be lowest in Oklahoma, Arkansas and North Dakota, while they are highest in Massachusetts, California and New York. Mortgage costs also vary widely. Monthly payments in select counties include:

• Dukes County, Mass. — $3,536

• King County, Wash. — $3,273

• Martin County, Texas — $2,718

• Adams County, Colo. — $2,378

• Rappahannock County, Va. — $1,906

• Reeves County, Texas — $1,669

• Canyon County, Idaho — $1,651

• Johnson County, Wyo. — $1,482

In most cases, total monthly costs for homeowners exceed rental costs, although lower-rent areas tend to have lower mortgage payments as well.

Monthly mortgage costs include principal, interest, property taxes, insurance and utilities.

Consider Home Prices in Your Area

You can get a clearer picture of ownership costs by looking at home prices in your area. According to Zillow, the median U.S. home value is about $370,320, though prices vary widely. Here are median home values in select states:

• Massachusetts — $667,265

• North Dakota — $290,642

As expected, states with higher home prices generally also have higher rents, and vice versa. However, these figures don’t account for additional ownership costs such as interest payments, property taxes, insurance or homeowners association fees.

Choosing To Buy or Rent

When you rent, you typically pay for rent and utilities, along with occasional extra fees such as trash service or renters insurance. You don’t need to cover property taxes, maintenance, HOA fees or other ownership-related costs. However, renting does not allow you to build equity. If you can afford the upfront and ongoing costs — and are ready for a long-term commitment — buying a home may offer greater financial benefits over time.

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.

More From MoneyLion: