Rent vs buy in Tempe, AZ
In Tempe, Arizona, the typical monthly rent is $1,623, while a typical home costs $458,515.
Renting comes out ahead by $31k over 7 years
Using Tempe's usual rent and home value, this comparison assumes 20% down and today's mortgage rate. The break-even point arrives in year 11.
Clearly labeled opinion, with the math shown. These are estimates, not quotes. The stamp changes when you change a number.
- Renting is ahead by
- $31k after 7 years
- Break-even point
- year 11 when owning catches up
- Full cost of owning
- $3,794 /mo year 1, against $1,623 rent
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Is it cheaper to rent or buy in Tempe?
During a 7-year period, renting is cheaper by $30,795 after counting the money you get back from selling. For the first 10 years, renting costs less. By year 11, owning catches up.
Renting. Owning. Net cost to date, by year.
Average rent compared with mortgage payment in Tempe
At Tempe's typical price, rent and the mortgage don't tell the whole story. Here are all monthly costs for year 1.
| Each month, year 1 | Amount | What it is |
|---|---|---|
| Rent | $1,623 | All of it, every month |
| Mortgage payment | $2,500 | $2,203 of it is interest in year 1 |
| Property tax | $183 | 0.48% of the value a year |
| Insurance | $89 | Census median for the city |
| Upkeep | $382 | 1% of the value a year |
| Owning, cash out | $3,154 | $296 of it builds equity |
| Lost return on the down payment | $745 | At 8.3% a year, this is what the cash would earn |
| Buying costs, spread out | $191 | 3.5% of the price over 7 years |
| True cost of owning | $3,794 | Cash paid, minus the equity portion, plus the two amounts above |
The figures behind Tempe's result
- Typical home valueZillow ZHVI, September 2026
- $458,515
- Typical rentZillow ZORI, September 2026
- $1,623 /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, Arizona, 1995 to 2025
- 5.2% 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, Tempe
- 0.48% of value
- Home insuranceCensus ACS 2020-2024, Tempe
- $89 /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 would reverse the outcome in Tempe?
Each line marks where Tempe's 7-year result changes, with all other factors staying the same.
Renting wins if
- Home prices grow less than 6.0% each year in this case. Our calculation uses 5.2%, Arizona's long-run rate.
- For this condition, the mortgage rate remains above 6.05%.
- A similar home rents for under $1,950 a month (the local typical rent is $1,623).
- Before year 11, you move.
When buying wins
- Home prices rise by more than 6.0% a year.
- You secure a mortgage rate under 6.05% (today's is 7.24%).
- The same home would cost more than $1,950 monthly to rent.
- You remain in the home for 11 years or more.
Tempe compared with the other 812 cities
| Measure | Tempe | Median city |
|---|---|---|
| Typical home value | $458,515 | $422,451 |
| Typical rent | $1,623 /mo | $1,837 /mo |
| Price-to-rent ratio | 23.5 (#189 of 813) | 18.5 |
| Home prices, last 10 years | 6.2% a year | 6.2% a year |
| Rents, last 5 years | 0.3% a year | 4% a year |
| Property tax | 0.48% | 0.87% |
| Households that rent | 58% | 42% |
Sources: Zillow ZHVI and ZORI, Census ACS 2020-2024.
More cities in Arizona
- Rent. Phoenix, AZ. Renting comes out ahead by $14k.
- Toss-up. Tucson, AZ. The result puts buying $672 ahead.
- Rent. Mesa, AZ. The gap favors renting by $24k.
- Rent. Gilbert, AZ. Renting comes out ahead by $26k.
- Rent. Chandler, AZ. Renting comes out ahead by $25k.
- Rent. Glendale, AZ. Renting comes out ahead by $17k.
- Rent. Scottsdale, AZ. Renting comes out ahead by $129k.
- Rent. Peoria, AZ. Renting comes out ahead by $17k.
- Buy. Surprise, AZ. Buying comes out ahead by $18k.
- Rent. Goodyear, AZ. Renting comes out ahead by $28k.
- Buy. Buckeye, AZ. Buying comes out ahead by $29k.
- Buy. Yuma, AZ. Buying comes out ahead by $11k.