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Rent vs buy in Ames, IA

For Ames, Iowa, typical rent is $1,240 /mo and a typical home costs $301,900.

Rent vs buy Ames verdict card: Renting costs $67k less over 7 years
Rent

Renting costs $67k less over 7 years

Today's mortgage rate and 20% down are applied to Ames's typical rent and home value. No break-even occurs within 30 years.

Our opinion is clearly labeled, and we show the math. These figures are estimates rather than quotes. Adjust one number and the stamp updates.

Renting leads by
$67k
after 7 years
Break-even point
30+ years
owning never catches up sooner
Actual cost of owning
$2,780 /mo
year 1, against $1,240 rent

Change my numbers

The stamp relies on Ames's typical rent and home value. Different rent, price and time periods can change the result.

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Enter a down payment, rent and price of your own. When they change, the stamp changes too.

Is renting or buying cheaper in Ames?

Over 7 years, renting is $67,255 cheaper after counting the money returned when you sell. For every year shown, owning has a higher net cost than renting, and it remains behind after 30 years.

The renting option. The owning option. Net cost up to now, year by year.

$0$100k$200k$300kyr 1yr 5yr 9yr 13yr 17yr 21yr 25yr 29yr 30

Average rent compared with mortgage payments in Ames

Rent and mortgage payments don't tell the whole story. Here are all monthly costs for year 1 at Ames's typical price.

Each month, year 1AmountWhat it is
Rent$1,240All of it, every month
Mortgage payment$1,646$1,451 of it is interest in year 1
Property tax$3501.39% of the value a year
Insurance$111Census median for the city
Upkeep$2521% of the value a year
Owning, cash out$2,358$195 of it builds equity
Lost return on the down payment$491Annual return on that cash at 8.3%
Buying costs, spread out$1263.5% of the price over 7 years
True cost of owning$2,780Cash out, minus the equity portion, plus the two lines above

The figures behind the Ames verdict

Typical home valueZillow ZHVI, September 2026
$301,900
Typical rentZillow ZORI, September 2026
$1,240 /mo
Down payment20% avoids private mortgage insurance, which the engine does not model
20%
Mortgage rateFreddie Mac Primary Mortgage Market Survey (FRED MORTGAGE30US)
7.24%
Home price growthFHFA house price index, Iowa, 1995 to 2025
3.7% a year
Rent growthCPI rent of primary residence, yearly growth 2006 to 2026
3.5% a year
Return on savings60% S&P 500 with dividends and 40% 10-year Treasuries, rebalanced yearly, 1928 to 2025
8.3% a year
Property taxCensus ACS 2020-2024, Ames
1.39% of value
Home insuranceCensus ACS 2020-2024, Ames
$111 /mo
MaintenanceFannie Mae, low end of 1% to 4%
1% of value a year
Buying costsFreddie Mac, middle of 2% to 5%
3.5% of price
Selling costsAgent commission plus closing costs
6% of price

Which change would flip the result in Ames?

With everything else kept as it is, each line marks the point where the Ames verdict over 7 years changes.

Renting is cheaper when

  • Home prices grow at a rate under 6.4% each year. Our estimate is 3.7%, drawn from Iowa's long-run rate.
  • The rate for a mortgage remains above 3.22%.
  • Renting a home like this costs under $1,960 each month. The local typical figure is $1,240.
  • At these numbers, owning never catches up if you move at any point during the next 30 years.

Buying is cheaper when

  • Home prices rise by more than 6.4% a year.
  • You secure a mortgage rate under 3.22%; today's rate is 7.24%.
  • You would pay more than $1,960 a month to rent the same home.

How Ames compares with the other 812 cities

MeasureAmesMedian city
Typical home value$301,900$422,451
Typical rent$1,240 /mo$1,837 /mo
Price-to-rent ratio20.3 (#324 of 813)18.5
Home prices, last 10 years3.8% a year6.2% a year
Rents, last 5 years4.2% a year4% a year
Property tax1.39%0.87%
Households that rent58%42%

Sources: Zillow ZHVI and ZORI, Census ACS 2020-2024.

Iowa's other cities

See Iowa's rent vs buy numbers