Rent vs buy in California
At today's numbers over 7 years, renting comes out ahead in 138 of the 177 cities with 50,000+, buying ahead in 26, and 13 land as toss-ups.
Rent or buy in California cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Los Angeles | Rent | renting wins by $111k | year 16 | $927,891 | $2,772 |
| San Diego | Rent | renting wins by $108k | year 15 | $980,490 | $3,004 |
| San Jose | Rent | renting wins by $210k | year 21 | $1,353,869 | $3,582 |
| San Francisco | Rent | renting wins by $128k | year 13 | $1,441,021 | $4,784 |
| Fresno | Buy | buying wins by $22k | year 6 | $384,885 | $1,945 |
| Chula Vista | Rent | renting wins by $72k | year 13 | $845,328 | $2,935 |
| Oxnard | Rent | renting wins by $33k | year 10 | $758,052 | $2,894 |
| Lancaster | Buy | buying wins by $31k | year 5 | $460,943 | $2,460 |
| Hayward | Rent | renting wins by $78k | year 14 | $816,424 | $2,652 |
| Orange | Rent | renting wins by $160k | year 19 | $1,120,386 | $3,037 |
| Santa Clara | Rent | renting wins by $263k | year 22 | $1,642,638 | $3,958 |
| Thousand Oaks | Rent | renting wins by $99k | year 14 | $1,027,863 | $3,357 |
| Vallejo | Rent | renting wins by $9k | year 8 | $517,277 | $2,200 |
| Costa Mesa | Rent | renting wins by $262k | year 26 | $1,419,109 | $3,121 |
| Jurupa Valley | Rent | renting wins by $10k | year 8 | $670,238 | $2,727 |
| West Covina | Rent | renting wins by $92k | year 15 | $835,380 | $2,552 |
| Rialto | Buy | buying wins by $13k | year 7 | $586,960 | $2,675 |
| El Monte | Rent | renting wins by $74k | year 14 | $752,488 | $2,451 |
| San Mateo | Rent | renting wins by $282k | year 23 | $1,674,908 | $3,968 |
| Chico | Rent | renting wins by $45k | year 14 | $458,244 | $1,561 |
| Hesperia | Buy | buying wins by $23k | year 6 | $461,766 | $2,237 |
| San Marcos | Rent | renting wins by $78k | year 13 | $953,656 | $3,311 |
| Carson | Rent | renting wins by $39k | year 10 | $787,368 | $2,909 |
| Santa Monica | Rent | renting wins by $314k | year 27 | $1,657,936 | $3,516 |
| Citrus Heights | Rent | renting wins by $13k | year 9 | $468,847 | $1,883 |
| San Ramon | Rent | renting wins by $280k | year 28 | $1,447,415 | $3,121 |
| Perris | Buy | buying wins by $40k | year 5 | $542,448 | $2,846 |
| Alameda | Rent | renting wins by $199k | year 24 | $1,145,869 | $2,876 |
| Bellflower | Rent | renting wins by $107k | year 18 | $793,206 | $2,221 |
| Lake Elsinore | Rent | renting wins by $29k | year 10 | $581,180 | $2,348 |
| Eastvale | Rent | renting wins by $62k | year 11 | $927,018 | $3,659 |
| Redondo Beach | Rent | renting wins by $255k | year 24 | $1,473,478 | $3,483 |
| Santa Cruz | Rent | renting wins by $199k | year 20 | $1,338,649 | $3,418 |
| National City | Rent | renting wins by $41k | year 11 | $685,179 | $2,426 |
| Monterey Park | Rent | renting wins by $116k | year 17 | $909,564 | $2,638 |
| Fountain Valley | Rent | renting wins by $252k | year 25 | $1,377,121 | $2,998 |
| West Sacramento | Rent | renting wins by $9k | year 8 | $520,898 | $2,263 |
| Arcadia | Rent | renting wins by $229k | year 23 | $1,375,605 | $3,412 |
| Placentia | Rent | renting wins by $168k | year 20 | $1,101,368 | $2,882 |
Sources: Zillow Home Value and Observed Rent indexes. The verdicts come from our rent vs buy method, run at 20% down over 7 years.
Our take on California
A $762k typical home value in California pushes most of the state toward renting. Over 7 years we see renting ahead in 138 of 177 cities, buying ahead in 26, with 13 toss-ups. For Los Angeles, a typical home goes for $927,891, and you'll pay $2,772 a month to rent. There, renting comes out ahead by $111k, and break-even doesn't arrive until year 16. A $1,353,869 home in San Jose rents for $3,582. Renting saves you $210k, and buying breaks even in year 21.
In cheaper inland cities, the math flips. Rent in Fresno runs $1,945 a month, while a typical home costs $384,885. Over 7 years, buying leaves you $22k ahead, and break-even comes in year 6. Sacramento is right on the line: a $470,552 home against $2,045 rent. The gap is just $3k, so it's a toss-up, and break-even lands in year 8.
If you stay put, statewide numbers help you catch up. Your property tax is 0.70%, less than the 0.94% US rate, and homeowners insurance runs $1,304 a year against $1,308 nationwide. Over the last 10 years, home prices grew 6.3% a year, which builds your wealth quickly once you own. Here 44% of households rent, compared with 35% nationwide, and the median rent is $2,036 a month against $1,413 in the US overall.
Our take: rent in California's pricey coastal cities, then invest what you save. In a cheaper inland city, buy if you'll stay there at least 6 years.