Rent vs buy in Memphis, TN
A typical home in Memphis, Tennessee costs $151,794, and the typical monthly rent is $1,259.
Over 7 years, buying wins by $36k
With Memphis's typical rent and home value, plus 20% down and today's mortgage rate. The break-even point occurs in year 3.
Clearly labeled opinion, with the math shown. These are estimates, not quotes. Adjust a number and the stamp updates.
- Owning leads by
- $36k after 7 years
- Break-even point
- year 3 when owning catches up
- Full cost of ownership
- $1,418 /mo year 1, against $1,259 rent
Change my numbers
Memphis's typical rent and home value drive the stamp. Your rent, home price and time period may change the result.
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Is it cheaper to rent or buy in Memphis?
Across 7 years, buying saves $36,210 after including the money you receive when you sell. In year 3, owning's net cost falls below renting's and remains lower.
The renting option. The owning option. Net cost so far for each year.
Average rent compared with mortgage payments in Memphis
Rent and mortgage payments don't tell the whole story. At Memphis's typical price, these are all monthly costs in year 1.
| Each month, year 1 | Amount | What it is |
|---|---|---|
| Rent | $1,259 | All of it, every month |
| Mortgage payment | $828 | $729 of it is interest in year 1 |
| Property tax | $138 | 1.09% of the value a year |
| Insurance | $114 | Census median for the city |
| Upkeep | $126 | 1% of the value a year |
| Owning, cash out | $1,206 | $98 of it builds equity |
| Lost return on the down payment | $247 | Annual earnings the cash would receive at 8.3% |
| Buying costs, spread out | $63 | 3.5% of the price over 7 years |
| True cost of owning | $1,418 | Subtract the equity part from cash out, then add the two lines above. |
Numbers behind the Memphis verdict
- Typical home value: Zillow ZHVI, September 2026
- $151,794
- Typical rent: Zillow ZORI, September 2026
- $1,259 /mo
- Down payment: 20% prevents private mortgage insurance, which the engine doesn't include.
- 20%
- Mortgage rate from Freddie Mac Primary Mortgage Market Survey (FRED MORTGAGE30US)
- 7.24%
- Growth in home prices based on FHFA house price index, Tennessee, 1995 to 2025
- Each year: 4.7%
- Rent growth: CPI for primary residence rent, yearly growth 2006 to 2026
- Each year: 3.5%
- Return on savings: 60% S&P 500 with dividends, 40% 10-year Treasuries, rebalanced each year, 1928 to 2025
- Each year: 8.3%
- Property tax from Census ACS 2020-2024, Memphis
- Rate on value: 1.09%
- Home insurance from Census ACS 2020-2024, Memphis
- Monthly cost: $114
- MaintenanceFannie Mae, 1% to 4% at the low end
- Each year: 1% of value
- Buying costsFreddie Mac, midpoint between 2% and 5%
- 3.5% of the price
- Selling costsAgent commission and closing costs
- 6% of the price
What could change the result in Memphis?
Each line marks where Memphis's 7-year result changes, while all other inputs stay the same.
Renting has the advantage when
- Our calculation uses 4.7%, which is Tennessee's long-run rate. This condition applies when home prices grow by less than 1.5% a year.
- The mortgage rate remains higher than 11.42%.
- For a home like this, monthly rent is below $870; the local typical figure is $1,259.
- Your move happens before year 3.
You come out ahead when buying
- Home prices grow by more than 1.5% a year.
- You secure a mortgage rate under 11.42%, compared with today's rate of 7.24%.
- Renting this same home would cost you over $870 a month.
- You remain for 3 years or longer.
How Memphis compares with the other 812 cities
| Measure | Memphis | Median city |
|---|---|---|
| Typical home value | $151,794 | $422,451 |
| Typical rent | $1,259 /mo | $1,837 /mo |
| Price-to-rent ratio | 10.0 (#788 of 813) | 18.5 |
| Home prices, last 10 years | 6.8% a year | 6.2% a year |
| Rents, last 5 years | 3% a year | 4% a year |
| Property tax | 1.09% | 0.87% |
| Households that rent | 55% | 42% |
Sources: Zillow data for ZHVI and ZORI, Census ACS 2020-2024.
More cities across Tennessee
- Rent. Nashville, TN. For renting, the advantage is $24k.
- Rent. Knoxville, TN. For renting, the advantage is $10k.
- Rent. Chattanooga, TN. For renting, the advantage is $11k.
- Rent. Clarksville, TN. For renting, the advantage is $19k.
- Rent. Murfreesboro, TN. For renting, the advantage is $36k.
- Rent. Franklin, TN. For renting, the advantage is $204k.
- Buy. Johnson City, TN. For buying, the advantage is $4k.
- Buy. Jackson, TN. For buying, the advantage is $25k.
- Rent. Hendersonville, TN. For renting, the advantage is $77k.
- Rent. Smyrna, TN. For renting, the advantage is $19k.
- Renting. Spring Hill, TN. Here renting is $45k ahead.
- Too close to call. Kingsport, TN. It's a toss-up, with buying ahead by $3k.