Buying a home remains a more effective long-term wealth-building path than renting and investing in 199 of 250 major cities across the U.S., according to a new study from AD Mortgage.
The analysis, which looked at buying vs. renting trends over a 10-year time horizon, evaluated two financial paths for consumers possessing downpayment cash: purchasing a home, or renting a similar property while investing the downpayment funds and any monthly savings into the stock market.
The findings indicate a clean sweep for homeownership under simple conditions. When renters invest only their initial downpayment capital, buying a home wins in all 250 cities analyzed. Even in historically high-cost housing markets like San Jose, Calif., and Seattle, purchasers end the decade with more wealth than renters relying solely on their downpayment investments.
To give renting a stronger financial case, the study also tested a scenario where highly disciplined renters invest both their upfront downpayment and any monthly savings generated when renting is cheaper than buying. Even under this tougher comparison, homeownership still generated more wealth in nearly 80% of the sample cities.
In its analysis, AD Mortgage drew on market data ending March 17, 2026, analyzing the five most populous cities across all 50 states. The ownership model assumed buyers secured a 30-year fixed-rate mortgage at 6.11% with a 20% downpayment. The renter-investor model used a 10.35% compound annual growth rate based on the long-term performance of the S&P 500 total return index.
Geographically, the financial advantages of buying versus renting vary sharply depending on local affordability, the study found. Florida and Idaho dominate the list of markets where homeownership substantially outperforms the aggressive rent-and-invest strategy. Cities like Miami and Meridian, Idaho, showed massive 10-year wealth advantages for buyers.
Conversely, the markets where the rent-and-invest model succeeds are heavily concentrated in areas with the highest barriers to entry for homebuyers, such as San Francisco and Kailua, Hawaii. In these exceptionally expensive markets, the monthly premium to buy a home is large enough that investing the savings overtakes property appreciation.
The report identified 26 U.S. markets where buying is already cheaper than renting on a strictly month-to-month basis, indicating that homeownership represents the clear long-term wealth winner. Cities falling into this category include Chicago, Baltimore, Detroit, Cleveland and Philadelphia.
