Quick answer
At current rates, renting wins over the full 30-year horizon in Los Angeles. Monthly ownership cost $5,816 (vs $$3,200/mo rent) plus CA's 0.74% property tax make the math tough.
Rent vs Buy · CA
Rent vs Buy in Los Angeles (2026)
Real math using CA's 0.74% property tax rate, $1,800/year average insurance, and a 6.8% 30-year fixed mortgage. Accounts for opportunity cost — what the down payment would earn invested at 7%.
Last updated: April 23, 2026
Verdict at current rates
Renting wins (30-year horizon)
In Los Angeles at CA's tax rates and current 6.8% mortgages, keeping the down payment invested at 7% beats homeownership even after 30 years. The standard advice "buy to build equity" doesn't apply here at today's price-to-rent ratio.
Monthly Cost Breakdown
Buying
$5,816/mo
Mortgage P&I
$680,000 loan, 30yr @ 6.8%
$4,433
Property tax
0.74% of assessed (CA avg)
$524
Homeowners insurance
$1,800/yr CA avg
$150
Maintenance
1%/yr of home value
$708
Cash at close: ~$191,250 ($20% down + fees)
Renting
$3,200/mo
2BR rent (median)
Los Angeles market rate
$3,200
Renters insurance
~$15/mo typical
$15
Down payment invested
$170,000 growing at 7%/yr
(opportunity cost)
Monthly gap: $2,616 cheaper than buying. Renter invests that difference.
Year-by-Year Net Position
"Buy wins by" = what you'd clear selling the home minus what the renter has in investments. Positive = buy ahead.
| Year | Home value | Buyer equity (net) | Renter portfolio (net) | Buy wins by |
|---|---|---|---|---|
| Year 5 | $985,383 | $-237,719 | +$207,838 | $-445,558 |
| Year 10 | $1,142,329 | $-342,367 | +$289,379 | $-631,746 |
| Year 15 | $1,324,272 | $-392,996 | +$436,748 | $-829,744 |
| Year 30 | $2,063,173 | +$21,694 | +$1,665,110 | $-1,643,416 |
Assumptions
Every rent-vs-buy calculator depends on the assumptions. Here are ours — all transparent, none cherry-picked to bias the answer.
This is a rule-of-thumb calculator. Real decisions involve your specific tax bracket, any HOA, mortgage points, closing-cost negotiations, and exact loan terms.
Frequently Asked Questions
Is it better to rent or buy in Los Angeles?
In Los Angeles at current mortgage rates (6.8%), renting and investing the down payment beats buying for the full 30-year horizon. Median monthly ownership costs ($5,816) well exceed median 2BR rent ($3,200), and CA's 0.74% property tax makes the math especially tough.
What's the monthly cost of owning a home in Los Angeles?
On a median $850K home with 20% down at 6.8% fixed rate: mortgage P&I $4,433, property tax $524 (0.74% of assessed value), homeowners insurance $150 (CA average $1,800/year), and maintenance $708 (1% of home value/year). Total: $5,816/month.
How much down payment do I need to buy in Los Angeles?
20% down on a median Los Angeles home ($850K) is $170,000. Plus closing costs of roughly 2.5% ($21,250). Total cash-to-close: about $191,250. FHA loans allow 3.5% down ($29,750) but require mortgage insurance that adds ~$331/month.
What's the 10-year cost of renting vs buying in Los Angeles?
Over 10 years in Los Angeles: renters pay $440,213 in cumulative rent but have $729,592 invested (assuming 7% return on the $170,000 down payment + monthly savings). Buyers have paid $835,406 in total ownership costs and hold $561,579 in home equity. Net: renting is ahead by $631,746 at year 10.