Rent vs buy in Decatur, AL
In Decatur, Alabama, the typical rent is $1,042 /mo and the typical home is $219,954.
Renting comes out ahead by $22k over 7 years
Using Decatur's usual rent and home value, plus 20% down and the current mortgage rate as inputs. Year 16 marks the break-even point.
A clearly labeled opinion with the math shown. These figures are estimates, not quotes. Adjust any number, and the stamp updates.
- Renting leads by
- $22k after 7 years
- Break-even point
- Year 16 when owning catches up
- Actual cost of owning
- $1,875 each month year 1, against $1,042 rent
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In Decatur, does renting or buying cost less?
Across 7 years, renting runs $21,618 less, once you count what you get back from selling. For the first 15 years, renting costs less. In year 16, owning catches up.
Renting option Ownership Net cost to date, by year
Average rent compared with mortgage payment in Decatur
Rent and the mortgage don't tell the whole story. At Decatur's typical price, these are all the monthly costs in year 1.
| Each month, year 1 | Amount | What it is |
|---|---|---|
| Rent | $1,042 | All of it, every month |
| Mortgage payment | $1,199 | $1,057 of it is interest in year 1 |
| Property tax | $66 | 0.36% of the value a year |
| Insurance | $120 | Census median for the city |
| Upkeep | $183 | 1% of the value a year |
| Owning, cash out | $1,568 | $142 of it builds equity |
| Lost return on the down payment | $358 | How much the cash would earn yearly at 8.3% |
| Buying costs, spread out | $92 | 3.5% of the price over 7 years |
| True cost of owning | $1,875 | Cash out, minus equity, plus both lines listed above |
The figures behind the Decatur verdict
- Typical home value, Zillow ZHVI, September 2026
- $219,954
- Typical rent, Zillow ZORI, September 2026
- $1,042 monthly
- Down payment: a 20% down payment avoids private mortgage insurance. The engine does not model this.
- 20%
- Rate for mortgages: Freddie Mac Primary Mortgage Market Survey (FRED MORTGAGE30US)
- 7.24%
- Growth in home pricesFHFA index for home prices, Alabama, 1995 to 2025
- 3.7% yearly
- How rents grow: CPI for primary residence rent, yearly growth 2006 to 2026
- 3.5% each year
- Return on savings: 40% 10-year Treasuries and 60% S&P 500 with dividends, rebalanced yearly, 1928 to 2025
- 8.3% each year
- Property tax: Census ACS 2020-2024, Decatur
- 0.36% of the value
- Home insurance: Census ACS 2020-2024, Decatur
- $120 a month
- Upkeep: Fannie Mae, low end of the 1% to 4% range
- Each year, it comes to 1% of the value.
- Buying costsFreddie Mac, 2% to 5% midpoint
- 3.5% of the price
- Sale costsAgent commission and closing costs
- 6% of the price
What would reverse the result in Decatur?
The 7-year verdict for Decatur changes at the value on each line, with all other inputs left alone.
Renting comes out ahead when
- Home prices rise by less than 4.9% a year (we apply 3.7%, Alabama's long-run rate).
- A mortgage rate above 5.49% remains in place.
- A similar home here rents for under $1,270 a month (the local typical is $1,042).
- Moving before year 16.
Buying comes out ahead when
- Home prices grow by more than 4.9% a year.
- Locking a mortgage rate under 5.49% (today's is 7.24%).
- For that same home, monthly rent would run you over $1,270.
- Staying 16 years or longer.
How Decatur compares with the other 812 cities
| Measure | Decatur | Median city |
|---|---|---|
| Typical home value | $219,954 | $422,451 |
| Typical rent | $1,042 /mo | $1,837 /mo |
| Price-to-rent ratio | 17.6 (#456 of 813) | 18.5 |
| Home prices, last 10 years | 5.8% a year | 6.2% a year |
| Property tax | 0.36% | 0.87% |
| Households that rent | 37% | 42% |
Sources: Zillow ZHVI, ZORI, Census ACS 2020-2024.
More cities in Alabama
- Rent. In Huntsville, AL: renting wins by $30k.
- Buy. In Mobile, AL: buying wins by $5k.
- Buy. In Birmingham, AL: buying wins by $44k.
- Buy. In Montgomery, AL: buying wins by $38k.
- Buy. In Tuscaloosa, AL: buying wins by $26k.
- Rent. In Hoover, AL: renting wins by $113k.
- Rent. In Auburn, AL, renting comes out ahead by $65k.
- Toss-up. For Dothan, AL, buying leads by $2k, so it's a toss-up.
- Rent. In Madison, AL, renting comes out ahead by $71k.