Facing the buy or rent dilemma in today’s housing market? Discover the five essential questions every first-time homebuyer should ask in 2025 to decide whether purchasing or renting makes sense — with up-to-date tips and actionable steps.

Deciding whether to jump into the housing market or rent instead is rarely an easy decision — especially if you’re a first-time homebuyer. But in today’s whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership.

A real estate boom during the pandemic pushed home prices to all-time highs. Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.

But is renting a better alternative? Rents have also seen fluctuations and shifts in trend. According to data, in June 2025 renting a starter home saved an average of $908 per month compared to buying in 49 out of the 50 largest U.S. metros. (Realtor) Meanwhile, studies show that in 2025 the cost of owning is on average still higher than renting across most U.S. metros. (Bankrate+1)

So, what’s the better choice for you? There’s a lot to consider when it comes to buying versus renting. Luckily, you don’t have to do it alone. Reach out to schedule a free consultation and we’ll help walk you through your options.

You may also find it helpful to ask yourself the following questions:

1. How Long Do I Plan to Stay in the Home?

You’ll generally get more financial benefit from a home purchase if you own the property for several years. Many past guides suggested five years; even in 2025 many analysts suggest a longer horizon given market conditions. (Wini+1)

If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you. There are costs associated with buying and selling a home, and it may take time for the property’s value to rise enough to offset those expenditures.

Even though housing markets can shift from one year to the next, you’ll typically find that a home’s value will ride out ups and downs and appreciate with time—but given today’s slower growth projections (3% or less in 2025) that appreciation may be more modest than past decades. (JPMorgan Chase)
The longer you own a property, the more you are likely to benefit from its appreciation.

Once you’ve found a community that you’d like to stay in for several years, then buying over renting can really pay off. You’ll not only benefit from appreciation, but you’ll also build equity as you pay down your mortgage — and you’ll have more stability overall.

Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make mortgage payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow.

Buying Could Be the Best Long-Term Investment.

2. Is it a Better Value to Buy or Rent in my Area?

If you know you plan to stay put for at least five years (or longer), you should consider whether buying or renting is the better bargain in your area.

One helpful tool for evaluating your options is a neighborhood’s price-to-rent ratio: divide median home price by median yearly rent. A higher ratio suggests buying is relatively more expensive versus renting. But in 2025, this equation needs extra context: in many U.S. metros the monthly cost of owning exceeds renting by a wide margin. (SmartAsset+1)

According to one 2025 study, only about 32 out of 343 U.S. cities (in a 300+ city sample) are more affordable to buy than rent. Details of “buy vs. rent” in many cities at Construction Coverage

Other data indicates the income required to afford homeownership remains much higher than renting. In February 2025, the typical homebuyer needed an annual income of ~US$117,000—82% more than what is required for typical rental housing (~US$64,000). (Redfin)

So even if renting seems like a better deal today, buying could still be the better long-term financial play—but only if the numbers in your specific area support it.

Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers for your neighborhood.