The Rent vs. Buy Myth: Why "Cheaper" Rent Is Costing You
- Kevin A Petersen
- Feb 17
- 5 min read
Updated: Feb 25
I hear it all the time: "Renting is cheaper than buying right now."
And on the surface? It's true. If you're comparing a $1,700/month rent payment to a $3,200/month mortgage payment in Salt Lake City, renting looks like the obvious choice.
But here's what that comparison misses: what happens to your money over time.
Because renting might cost less per month today—but it's costing you wealth in ways you're not seeing on your bank statement.
The Math Everyone's Getting Wrong
Let's break down what's really happening when you're looking at homes for sale in Salt Lake City versus continuing to rent:
If you rent:
Year 1: You pay $1,700/month ($20,400/year)
Year 2: Rent increases to $1,870/month ($22,440/year) — that's a 10% increase, which is typical in Utah right now
Year 3: Rent increases to $2,057/month ($24,684/year)
Year 5: You're paying $2,488/month ($29,856/year)
Total paid over 5 years: $122,364
Equity built: $0
If you buy:
Year 1-5: You pay $3,200/month ($38,400/year)
Your payment stays the same (locked in with your mortgage) - No More Rent Hikes!
Total paid over 5 years: $192,000
Equity built: Approximately $80,000-$100,000
(from paying down your mortgage + property appreciation)
Yes, you paid more per month. But here's what you got for it:
$80K-$100K in equity you can access for your next home, investment, or emergency
A locked-in housing cost that won't increase for 30 years
Tax deductions on mortgage interest
An asset that historically doubles in value every 10 years in Utah.
The Hidden Cost of "Saving Money"
When you rent, that $1,700/month disappears. Every single month. Forever.
When you buy, a portion of that $3,200/month stays with you as equity. You're not just paying for a place to live—you're building an asset.
And here's the kicker: the gap between renting and buying gets smaller every year.
By Year 3, your rent has likely increased to $2,057/month. Your mortgage? Still $3,200.
That "savings" you were getting? It's shrinking fast.
By Year 5, you're paying $2,488/month in rent with nothing to show for it. Meanwhile, the homeowner has nearly $100K in equity and the same monthly payment they started with.
What $500K Actually Gets You in Salt Lake City
As a Salt Lake City real estate agent, I get asked this all the time: "What does $500k buy in Salt Lake City?"
Here's the reality in 2026:
Sugar House: Townhomes or condos in the $480-530K range. Some older homes with character that need updating.
The Avenues: Condos for sale downtown Salt Lake City or smaller historic homes. You're paying for location and walkability.
Murray/Millcreek: Single-family homes with 3-4 bedrooms. Good bones, established neighborhoods.
West Valley/Taylorsville: Newer construction or larger homes with yards. More space for your money.
Rose Park/Glendale: Up-and-coming areas with homes under $500k.
It's not going to be your dream home with every upgrade. But it's yours. And in five years, it'll be worth $600-650K based on current appreciation trends.
"But What If I'm Not Ready to Commit?"
I get it. Buying a home feels like a huge commitment. What if you want to move in a few years?
Here's the truth, especially for first-time homebuyers in Salt Lake City: you don't have to stay in your first home forever.
Most of my clients who bought homes 3-5 years ago have already moved. Here's what they did:
Sold their first home and used the equity for a down payment on their next one
Converted it to a rental property and became landlords while living somewhere else
Refinanced and pulled cash out to invest elsewhere
The flexibility you think you're keeping by renting? You're actually giving it up. Because when you own, you have options. When you rent, you're just paying someone else's mortgage.
The Real Question Isn't "Can I Afford to Buy?"
The real question is: Can you afford NOT to?
Let's be honest about what's happening in the Salt Lake City housing market in 2026:
Home prices have been increasing 8-10% per year
Rent has been increasing 8-12% per year
Economists predict the median home price will hit $1M by the time the Olympics return to Utah in 2034
If you wait 2-3 years to "save up more" or "see if prices come down," here's what will likely happen:
The $500K home you're looking at today will cost $600K
Your rent will have increased $300-400/month
You'll have spent $50K+ on rent with zero equity to show for it
I'm not saying you should buy a home you can't afford or that isn't right for you. I'm saying don't let the myth that renting is "cheaper" keep you from building wealth.
What About the Down Payment?
This is where people get stuck. "I can afford the monthly payment, but I don't have $100K saved for a down payment."
Good news: you don't need $100K.
Most first-time homebuyers in Salt Lake City put down 3-5%. On a $500K home, that's $15K-$25K—not pocket change, but very different from six figures.
Here’s where a lot of people get that money:
Tax Returns
401K Loan
Gift from Parents or Family
Monthly Savings
And here's what people don't realize: there are programs and strategies to make that even more achievable:
FHA loans (3.5% down) - ‘203(k) Loans’ also available for fixer-uppers.
Conventional loans (3% down)
Seller concessions (sellers can contribute to your closing costs)
First-time homebuyer programs specific to Utah and city/county
The barriers you think are in your way? Most of them are myths too.
First-Time Homebuyer Tips for Salt Lake City
As someone who works with a lot of first-time buyers—especially diverse or LGBTQ+ professionals who've been told wealth-building isn't for them—here's what I want you to know:
Get pre-approved early. Knowing your budget makes everything clearer and less overwhelming. I can give you some mortgage lender recommendations, but also check with your bank.
Don't wait for perfect. Your first home doesn't have to be your forever home. It just has to be your entry point into building equity. We can check a lot of want items off the list but we likely won’t get them all.
Work with an understanding realtor. Someone who gets your life, your family structure, and your goals. Someone who won't make assumptions or waste your time.
Focus on diverse or LGBTQ friendly neighborhoods. Places where you'll actually feel safe and at home, not just tolerated.
Run your own numbers. Don't just accept what people tell you. Look at what you're actually spending on rent vs. what you'd build in equity.
Affordable Homes in Salt Lake City Still Exist
I know "affordable" feels like a joke when the median price is over $500K. But here's the thing: affordable is relative to what you're getting.
If you're paying $2,000/month in rent and getting nothing back, a $3,200 mortgage that builds you $100K in equity over five years is actually more affordable in the long run.
And there are still homes for sale in Salt Lake City that make sense financially:
Condos and townhomes in the $400-500K range
Homes in West Valley, Kearns, and Taylorsville under $500K
Fixer-uppers in up-and-coming neighborhoods with strong equity potential
The key is working with a Salt Lake City real estate agent who understands your budget and won't waste your time showing you things you can't afford or don't want.
So What Do You Do?
Whether you're just starting to think about buying, actively searching, or ready to make offers, I'm here for a real conversation about your goals.
No pressure. No judgment. Just an honest discussion about what you're looking for and how we can find it together.
As an inclusive, LGBTQ affirming realtor in Utah, I've helped many queer and diverse professionals navigate the Salt Lake City market and find homes that fit their lives and their budgets.
Want to see what buying could look like for you? Let's run your numbers together. You can bring your questions (and your doubts) to my ASK ME ANYTHING LIVE STREAM. See you soon.
Kevin A Petersen is an LGBTQ+ affirming real estate agent serving buyers and sellers throughout the Salt Lake City area. Schedule a no-pressure conversation about your home buying goals.
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