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VerdictMisleading2 sources
Common claim· Home ownership

Renting is throwing money away.

Rent buys no ownership stake, which is the true part. But owners also pay large costs that build none, such as property taxes, insurance and upkeep, and the wealth gap between owners and renters partly reflects who is able to buy. As a general rule, “throwing money away” misleads; the answer depends on price, place and how long a household stays.

VerdictMisleadingContains some truth but leads you to a wrong conclusion.2 sources · Updated 18 October 2026
2 sourcesHow we rate claims
Two leaking buckets: renting leaks through one hole, owning leaks through tax, insurance and upkeep, so neither money is simply saved.
Rent is one leak; owners leak through tax, insurance and upkeep too. Photo: The Realigned

Where you’ve heard it

“Renting is throwing money away.” Bernadette Joy, Bankrate expert contributor, July 1, 2025, in an article on building wealth while renting. Read the article

“Renting is throwing your money away.” Liberty Vittert Capito, opinion column in The Hill, June 5, 2026 (AOL copy). Read the column

“you’re just throwing away money on rent” Erica Gellerman, CPA, Credit Karma guide to renting versus buying, updated August 11, 2026. Read the guide

Renting is throwing money away.
Bernadette Joy, Bankrate expert contributor, July 1, 2025View original
Renting is throwing your money away.
Liberty Vittert Capito, opinion column in The Hill (AOL copy), June 5, 2026View original
you’re just throwing away money on rent
Erica Gellerman, CPA, Credit Karma, updated August 11, 2026View original

Why people believe it

The case for the claim
A renter’s payments end when the lease ends and leave nothing behind. A homeowner with a mortgage turns part of each payment into ownership as the debt shrinks, and gains if the home rises in value. The Federal Reserve’s Survey of Consumer Finances shows how large that gain can be. Between 2019 and 2022, the median net housing value of families that owned a home, meaning its value minus home-secured debt, rose from $139,100 to $201,000, while housing debt stayed roughly flat. In 2022 the median owner family had a net worth of $396,200, against $10,400 for the median renter or other non-owner. About a third of owners had no home debt at all. Seen this way, rent looks like a cost with no return, and ownership like a forced savings plan that many households would not otherwise build.
Held by supporters of homeownership as a route to saving, and described by consumer-finance guides as the view that rent payments only benefit the landlord. Source 1 (opens the source in a new tab)
Is this fair to that view?

What the evidence shows

The wealth gap is real. In the Federal Reserve’s 2022 survey, the median homeowner family had a net worth of $396,2001, against $10,400 for the median renter or other non-owner.1 But the same report says income is considerably higher for homeowners than for non-homeowners, and family income is positively correlated with net worth.1 So the gap compares two different kinds of households. It does not show how much of it was caused by owning.

The second point is cost. The claim treats every renter’s dollar as lost and every owner’s dollar as saved. Owners pay for much more than the loan. The National Association of Home Builders analysed the Census Bureau’s 2019 American Housing Survey and found that owners of single-family detached homes spent about $9,240 a year2 to operate and maintain their homes, not counting mortgage payments.2

Key figure$9,240average yearly cost of running a single-family home, excluding mortgage payments (2019 survey)Source 2 · National Association of Home Builders (Economics and Housing Policy) (opens the source in a new tab)
Average annual operating costs of owner-occupied single-family detached homes, 2019 American Housing Survey, as analysed by NAHB (2021).
CostAverage per year
Property taxesjust under $3,700
Fuels (electricity, gas, oil)about $2,500
Home insuranceabout $1,250
Maintenanceabout $950
Water and trashabout $850
Source: Operating Costs of Owning a Home (opens the source in a new tab)

Some of that, such as fuel and water, is a cost renters pay in some form. Property taxes, insurance and repairs do not build ownership. As a share of the home’s value, operating costs averaged close to 5 percent2, and above 6 percent for homes built before 1960.2 About two-thirds of owner families also carried debt secured on their home in 2022, with a median of $155,600 for those with a mortgage, so interest on that debt is a further cost that these figures do not measure.1

Equity still counts. Owners gain when home prices rise, and the 2019 to 2022 jump in net housing wealth was large.1 But the Federal Reserve report ties that rise to home values increasing sharply, and says rising prices also mean declining affordability for would-be buyers.1 A gain from a price boom is not guaranteed for the next buyer.

Not measured here: the costs of buying and selling a home, mortgage interest, and rent levels in any particular market. Those decide the answer for a given household. This is an explanation of evidence, not advice.

The better question

For this household, in this place and over the years it expects to stay, which costs less once every cost of renting and of owning is counted?

Sources

  1. 1Changes in U.S. Family Finances from 2019 to 2022: Evidence from the Survey of Consumer Finances (opens the source in a new tab) · Federal Reserve Board, 2023 · Report
  2. 2Operating Costs of Owning a Home (opens the source in a new tab) · National Association of Home Builders (Economics and Housing Policy), 2021 · Report
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