Rent vs Buy
Lehigh Valley

Buying typically beats renting once you plan to stay in the home at least 5–7 years. Shorter horizons usually favor renting because closing costs, agent fees, and early-mortgage interest accrue before you've built meaningful equity. The break-even horizon depends on local appreciation, rent inflation, your down payment, and the mortgage rate. In high-appreciation markets like much of the Lehigh Valley, buying can win even at 3–4 years. In flat-appreciation markets it may need 7+ years.

Equity is the gap between what your home is worth and what you still owe at the horizon. The calculator estimates that equity at the end of your horizon and subtracts it from your total buying cost. That treats the built equity as money you can take with you if you sell — versus rent where every dollar paid is gone. A 30-year mortgage amortizes slowly in the early years, so most of your equity at year 5 comes from price appreciation rather than principal paydown.

Home price appreciation is one of the most sensitive assumptions in any rent-vs-buy calculator. At 3% per year, a $350,000 home grows to about $405,000 in five years; at 5% it grows to about $446,000. That difference becomes tens of thousands of dollars in your equity calculation, which can flip the verdict. The calculator defaults to 3% per year — a conservative rate that approximates long-run U.S. home price growth but is below recent Lehigh Valley short-term trends.

When you rent, your landlord covers maintenance, repairs, roof replacement, and most appliances. When you buy, those costs fall on you — typically 1–2% of the home's value per year. The calculator intentionally omits maintenance cost from the rent comparison because landlords factor it into what they charge. The buy side also excludes a separate maintenance line (alongside property tax and insurance) so the rent/buy numbers stay comparable. In practice, expect to budget an extra ~1% of home price per year for upkeep if you buy.

Shorter horizons usually favor renting, but it's not automatic. Transaction costs (closing costs at buy, agent fees at sell) eat into returns quickly. Moving in under five years also means most of your mortgage payment is interest rather than principal, so you don't build much equity from paydown. The break-even point moves toward buying when home prices are appreciating fast, your down payment is large, or you're comparing against rising rent. Try the slider at 3 years to see how sensitive your scenario is.