Why Owning Still Builds Wealth When Renting Feels Easier

By Ted Holmes

Edward “Ted” Holmes is a Licensed Associate Real Estate Broker and founder of The Holmes Team at William Raveis Real Estate, serving Chappaqua and Northern Westchester County, NY. With 25 years licensed, 456 career transactions, and consistent top-ranking production statewide, he is a recognized expert in residential, luxury, and commercial real estate.

Renting can feel like the simpler, cheaper choice, and right now a lot of people feel that way. There’s nothing to repair, no property tax bill, no reason to watch mortgage rates. You pay what you owe and move on.

What that overlooks is a slower cost that doesn’t show up on the monthly statement: renting builds someone else’s wealth, while owning builds yours.

Where your money ends up. The difference really comes down to one thing. Rent goes to your landlord, and it’s gone. A mortgage payment is split: part covers the cost of living there, and part pays down your loan and turns into equity that stays yours. As the home appreciates, that equity grows with it, and many owners also see tax benefits on mortgage interest and property taxes, though your accountant is the one to tell you what applies to you. So renting can cost less this month and still leave you with nothing to show for it after several years.

Even the worst timing worked out. First American, one of the largest title and settlement companies in the country, studied the long-term impact of renting versus owning, and they did it thoroughly. On the ownership side, they counted everything: the mortgage, taxes, insurance, repairs, and maintenance, then set it against the equity owners gained from appreciation and paying down the loan.

They ran it from four starting points: 2006 at the peak of the bubble, 2015, 2019 just before the pandemic, and 2022 when rates jumped. The outcome held every time. Owners came out ahead, and renters spent for years with nothing to keep. The 2006 buyers make the point best. They bought at the very top, right before the crash, and even they ended up ahead over time.

When renting is the better call. Owning doesn’t win in every case, and I’ll say so plainly. If you’re only staying a year or two, renting can be the smarter move. But the longer you own, the wider that wealth gap gets, and after 25 years working this market, plus eight years in mortgages before that, I’ve watched it play out firsthand here in Westchester. The median single-family price is now around $999,000, and with inventory still tight, owners in this market have kept building equity.

Renting is easier in the moment. Owning is what builds wealth over the long run. If you’re wondering what buying would actually look like for you, reach out. Call or text me at 1-914-548-6179, email me at ted.holmes@raveis.com, or visit blog.theholmesteamny.com. I’ll run the real numbers for your situation, so you know exactly where you stand before you decide anything.