Rent vs buy in Ann Arbor, MI
In Ann Arbor, Michigan, typical rent is $2,026 /mo and typical home value is $517,346.
Over 7 years, renting comes out $124k ahead.
Today's mortgage rate and 20% down are used with Ann Arbor's usual rent amount and home value. There's no break-even point during the next 30 years.
Our clearly labeled opinion includes the math. The figures are estimates, not quoted prices. Adjust a number, and the stamp will change.
- Renting leads by
- $124k after 7 years
- Break-even point
- 30+ years owning never catches up sooner
- Full cost of owning
- $4,791 /mo year 1, against $2,026 rent
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Is it cheaper to rent or buy in Ann Arbor?
After counting the money returned to you when you sell, renting costs $124,144 less over 7 years. For every year shown, renting's net cost remains lower than owning's. Within 30 years, owning still doesn't catch up.
Rent. Buy. Net cost by year so far.
Average rent compared with mortgage payment in Ann Arbor
The full picture includes more than rent and mortgage payments. All monthly costs for year 1 appear here at Ann Arbor's typical price.
| Each month, year 1 | Amount | What it is |
|---|---|---|
| Rent | $2,026 | All of it, every month |
| Mortgage payment | $2,821 | $2,486 of it is interest in year 1 |
| Property tax | $724 | 1.68% of the value a year |
| Insurance | $93 | Census median for the city |
| Upkeep | $431 | 1% of the value a year |
| Owning, cash out | $4,069 | $334 of it builds equity |
| Lost return on the down payment | $841 | The return the cash would earn each year: 8.3% |
| Buying costs, spread out | $216 | 3.5% of the price over 7 years |
| True cost of owning | $4,791 | Cash paid out, minus the equity portion, plus the two entries just listed |
Ann Arbor's verdict explained through the numbers
- Typical home valueZillow ZHVI, September 2026
- $517,346
- Typical rentZillow ZORI, September 2026
- $2,026 /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, Michigan, 1995 to 2025
- 3.8% 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, Ann Arbor
- 1.68% of value
- Home insuranceCensus ACS 2020-2024, Ann Arbor
- $93 /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
What change would reverse the result in Ann Arbor?
Each line marks the threshold where Ann Arbor's 7-year verdict changes, with all other values unchanged.
When renting wins
- Growth in home prices stays under 6.7% a year. We apply 3.8%, Michigan's long-term rate.
- A mortgage's interest rate remains above 2.90%.
- Renting a similar home costs less than $3,360 each month. The typical rent here is $2,026.
- If you move at any point during the next 30 years, owning won't catch up at these figures.
Buying is cheaper when
- Home prices rise by more than 6.7% a year.
- Your mortgage rate is locked under 2.90%; today's rate is 7.24%.
- If you rented this same home, the monthly cost would exceed $3,360.
Ann Arbor compared with the other 812 cities
| Measure | Ann Arbor | Median city |
|---|---|---|
| Typical home value | $517,346 | $422,451 |
| Typical rent | $2,026 /mo | $1,837 /mo |
| Price-to-rent ratio | 21.3 (#278 of 813) | 18.5 |
| Home prices, last 10 years | 5% a year | 6.2% a year |
| Rents, last 5 years | 3.6% a year | 4% a year |
| Property tax | 1.68% | 0.87% |
| Households that rent | 55% | 42% |
Sources: Zillow ZHVI and ZORI, Census ACS 2020-2024.
More cities in Michigan
- Buy. In Detroit, MI, buying comes out ahead by $72k.
- Rent. In Grand Rapids, MI, renting comes out ahead by $20k.
- Buy. In Warren, MI, buying comes out ahead by $7k.
- Rent. In Sterling Heights, MI, renting comes out ahead by $32k.
- Toss-up. In Lansing, MI, it's a toss-up, with buying ahead by $2k.
- Buy. In Dearborn, MI, buying comes out ahead by $18k.
- Rent. In Livonia, MI, renting comes out ahead by $26k.
- Rent. In Troy, MI, renting comes out ahead by $89k.
- Rent. In Farmington Hills, MI, renting comes out ahead by $95k.
- Rent. In Westland, MI, renting comes out ahead by $7k.
- Buy. In Flint, MI, buying comes out ahead by $39k.
- Rent. In Wyoming, MI, renting comes out ahead by $23k.