Rent or own in retirement

One thing decides whether to rent or own in retirement: have you already paid off a home you own? Most older Americans own their homes. In 2026 Census data, 79.1% of householders 65 and over owned their home. Your monthly bill is lowest when your house is debt free. Buying a new home later in life is a different kind of bet. In 813 US cities, it takes a median 10 years for owning to cost less than renting.

Does buying a house at 50 make sense?

Buying makes sense only if you stay long enough to repay the costs of entering and exiting. According to Freddie Mac, buyer closing costs run 2% to 5% of the price. These cover lender charges, title fees and taxes payable at purchase. Our model assumes buying costs 3.5% and selling costs 6%. For a $332,700 home, the down payment and buying fees tie up $78,185 starting on day one.

Choose renting, and the cash remains invested. Since 1928, stocks and bonds in a 60/40 mix have returned 8.3% a year, according to NYU Stern's data. Growing at that rate, $78,185 becomes $259,000 in 15 years. Owning first comes out ahead of renting in total during the break-even year. That point arrives in year 10 in the median city. Owning never catches up within 30 years in 134 cities.

Rent or own in retirement: which costs less a month?

Owning a home free and clear is the cheapest option on a fixed income. Still, fewer retirees are free and clear. Between 1989 and 2022, Harvard's older adults report says the mortgage share among owners aged 65 to 79 grew from 24% to 41%. From 2021 Census data, that same report lists median monthly housing costs for people 65 and over:

• Owners with no mortgage: $520 a month.
• Monthly cost for renters: $940.
• Owners carrying a mortgage pay $1,470 each month.

Repairs aren't included in those figures. We set aside 1% of the home's value each year for upkeep, as explained in our home maintenance cost guide. At the Freddie Mac rate of 7.24%, monthly cash out for a 30-year loan on the typical US home is $2,461.

Is selling the house and renting a good idea?

Sell a home that's paid off and you turn money tied up in it into cash you can spend. This matters because older households keep much of their wealth in their homes. The 2022 Federal Reserve survey put median net worth at $364,500 for ages 55 to 64 and $409,900 for ages 65 to 74. Plan on losing about 6% of the price through agent fees and transfer taxes.

The rest is rarely affected by taxes. Under the IRS rule, up to $250,000 of gain is excluded, or $500,000 on a joint return. During the last 5 years, you must have owned the home and lived there for 24 months. That calculation is covered in our guide about selling your home and renting.

When you retire, is buying or renting better?

Renting works when your sale cash, once invested, grows faster than your rent. Later in life, the danger is that rent goes up while your income doesn't. According to the Bureau of Labor Statistics price index, US rents have gone up 3.5% a year since 2006.

That squeeze hits hardest on retirees who rent without any savings. Per Harvard's housing center, older renters hold just 2% of what older owners have in net wealth at the median. Half or more of older renters carried a cost burden across 88 of the 100 largest metros. Renting during retirement works as a strategy only if you keep the sale money invested, as rent and invest vs buy shows.

Should seniors rent or buy a condo?

If there's a real chance of moving again within 10 years, rent, because owning takes that long to catch up in the median city. Changes in plans happen after 50. Among adults 50 and older, 75% wanted to remain in their homes, though 44% felt a move was unavoidable, according to a 2024 AARP survey. A lower cost of living would cause sixty-five percent to leave. 43% say they expect a more accessible home to be necessary. A condo you buy now must outlast those odds.

How to check the figures for a 10 or 15 year stay

Before buying or signing a lease, test your own city and the length of your stay. The Federal Reserve's 2024 survey of households found that 84% of adults 60 and older own their homes, while 14% rent. Owners in that 84% group should start with their sale price. Next, use the rent versus buy calculator:

• Use rent versus buy by city to choose your city and load local prices and rents.
• Select the 10 or 15 year stay rather than the default 7.
• Add the cash you'd put down, or the cash from the sale of your current home.
• Check the break-even year and see if it falls within your stay.