Updated September 2026
Rent vs. buy in Texas is the question I get more than any other, and for the last two years my answer has surprised people. Basically, at today’s market rates, renting has been winning.
That’s still true if you’re buying a resale home at 6.67%. In fact, the math isn’t close.
But that’s not the only door open right now. Because FHA loans need just 3.5% down, and because builders are paying for rate buydowns as low as 2.99%, there’s a second path. And on that path, the math flips completely.
Here’s what makes this rent vs. buy in Texas comparison so simple. Both paths use the same 3.5% down payment, the same loan amount, and the same FHA mortgage insurance. So it’s the same buyer, the same cash to close, the same city, the same month. Only the interest rate changes.
In Houston, therefore, that one change is worth $753 a month and about $130,000 over ten years.
So which path is actually open to you? That’s a 15-minute conversation.
Not every buyer qualifies for FHA, and not every advertised buydown is what it looks like. Still, I’ll tell you straight. Book a free 15-minute call →
Rent vs. buy in Texas: the short answer
- Both paths need only 3.5% down — $12,075 in Houston, or $14,175 in DFW. So cash to close isn’t what separates them. Instead, the rate is.
- Path A — resale, FHA, 6.67%: renting costs less by about $1,082 a month in Houston and $1,715 in DFW. As a result, break-even lands well past year 12.
- Path B — new construction, FHA, permanent 2.99% buydown: the gap drops to $396 in Houston and $796 in DFW. Consequently, break-even moves up to roughly year 4 in Houston and year 6 in DFW.
- On Path B in Houston, prices could fall 0.6% a year for a decade and buying would still win. Ultimately, that’s what a 368-basis-point rate cut buys you.
- However, the fine print decides everything. Specifically: permanent versus temporary buydown, life-of-loan FHA mortgage insurance, MUD and PID tax rates, and whether the discount is baked into the sticker price. All eight items are below.
Already settled your own rent vs. buy in Texas question? Then skip the reading and book 15 minutes here.
Rent vs. buy in Texas, Path A: resale home, FHA, market rate
Houston: $345,000 resale, 3.5% down, 6.67%
To begin with, $345,000 is the median single-family sale price in HAR’s most recent housing update.
- Down payment: $12,075
- Base loan: $332,925
- Upfront MIP (1.75%), since FHA rolls it into the loan: $5,826
- Total financed: $338,751
| Line item | Monthly |
|---|---|
| Principal & interest @ 6.67% | $2,179 |
| FHA annual mortgage insurance (0.55%) | $155 |
| Property tax (after homestead exemption) | $479 |
| Homeowner’s insurance | $400 |
| Maintenance reserve (1%/yr) | $288 |
| Total | $3,501 |
Dallas–Fort Worth: $405,000 resale, 3.5% down, 6.67%
Meanwhile, the DFW metro median sat at $404,900 in July, down about 1.7% from a year earlier. Still, keep in mind that’s the metro number. Dallas city proper runs closer to $475,000 per Redfin, while Collin and Denton go higher and Fort Worth comes in lower.
- Down payment: $14,175
- Base loan: $390,825
- Upfront MIP, likewise rolled in: $6,839
- Total financed: $397,664
| Line item | Monthly |
|---|---|
| Principal & interest @ 6.67% | $2,558 |
| FHA annual mortgage insurance (0.55%) | $182 |
| Property tax (after homestead exemption) | $620 |
| Homeowner’s insurance | $417 |
| Maintenance reserve (1%/yr) | $338 |
| Total | $4,115 |
What renting costs
Houston. HAR’s July rental report put the average single-family lease at $2,419, so prices were basically flat year over year. Meanwhile 9,832 listings sat active, and days on market rose from 34 to 37. Apartments are a separate market, though. For example, RentCafe has the Houston average around $1,344, down 1.4%.
Dallas. A similar single-family or three-bedroom rental runs roughly $2,300 to $2,500. For instance, RentCafe puts the Dallas apartment average at $1,592, down 0.9%, with three-bedrooms at $2,221. Zumper’s all-property median, meanwhile, hit $1,680 in August, down sharply.
DFW’s soft rents aren’t an accident. Because the metro absorbed close to 97,000 new apartment units this cycle, roughly 40% of listings now offer move-in deals. Therefore, if you rent in DFW right now, you have leverage you didn’t have three years ago.
The Path A verdict on rent vs. buy in Texas
| Own | Rent | Monthly gap | |
|---|---|---|---|
| Houston | $3,501 | $2,419 | $1,082 |
| Dallas–Fort Worth | $4,115 | ~$2,400 | ~$1,715 |
Now run the full ten-year model — 2% price growth, 3% rent growth, 5% return on invested savings, and 7% cost to sell. As a result, renting wins by roughly $66,000 in Houston and $155,000 in DFW.
To break even at 6.67%, therefore, you’d need 5.1% yearly price growth over 5 years or 3.6% over 10 in Houston, and 6.5% or 5.0% in DFW. Yet Houston is flat, and DFW is down 1.7%.
So that’s the honest answer on rent vs. buy in Texas along Path A, and I won’t dress it up. Ultimately, a 6.67% rate with permanent mortgage insurance on a low-down-payment loan is just an expensive way to own a house. If a resale is the only thing you’re being shown, though, let’s talk before you write an offer.
Rent vs. buy in Texas, Path B: new construction, FHA, 2.99% buydown
Here’s where rent vs. buy in Texas changes.
Builders in both metros are sitting on finished homes and finished lots. Because a price cut resets comps for the whole community, while a buydown doesn’t, they’d rather spend the money on your rate. That’s exactly why 2.99% money exists in a 6.7% market.
Again, it’s the same 3.5% down, the same loan amount, and the same FHA mortgage insurance. Only the rate moves.
Houston: $345,000 new construction, 3.5% down, 2.99%
- Down payment: $12,075
- Total financed: $338,751, since it’s identical to Path A
| Line item | Monthly | vs. Path A |
|---|---|---|
| Principal & interest @ 2.99% | $1,426 | −$753 |
| FHA annual mortgage insurance (0.55%) | $155 | — |
| Property tax — MUD community | $690 | +$211 |
| Homeowner’s insurance (new build) | $340 | −$60 |
| Maintenance reserve (0.5%, under warranty) | $144 | −$144 |
| HOA | $60 | +$60 |
| Total | $2,815 | −$686 |
Gap vs. renting: $396 a month. So that’s down from $1,082.
Two lines in that table need a flag. On purpose, I used the numbers that hurt the case rather than help it.
First, the tax line went up, not down. Most new construction in Houston’s suburbs sits inside a Municipal Utility District, and MUD-inclusive rates usually run 2.3% to 3.0% instead of roughly 1.9% in older neighborhoods. Here I used 2.4%. So that’s a $211 monthly penalty against a resale, and it’s the thing new-construction buyers miss most often. Older MUDs do drop as their bonds get paid off, but a brand-new district won’t for a while.
Second, insurance and maintenance went down. After all, a new roof, current building code, and a 1-2-10 builder warranty are worth real money. Therefore I cut insurance about 15% and halved the maintenance reserve during the warranty years. Both moves are fair. Even so, both go back toward Path A numbers by year six.
Also, if you find new construction inside city limits with no MUD, the tax line drops to about $479 and the total lands near $2,604 — a $185 gap. In other words, roughly a tie with renting. Those communities exist in both metros, though they’re easy to miss, so ask me where they are.
Dallas–Fort Worth: $405,000 new construction, 3.5% down, 2.99%
- Down payment: $14,175
- Total financed: $397,664, again identical to Path A
| Line item | Monthly | vs. Path A |
|---|---|---|
| Principal & interest @ 2.99% | $1,674 | −$884 |
| FHA annual mortgage insurance (0.55%) | $182 | — |
| Property tax — PID/high-rate district | $776 | +$156 |
| Homeowner’s insurance (new build) | $355 | −$62 |
| Maintenance reserve (0.5%, under warranty) | $169 | −$169 |
| HOA | $60 | +$60 |
| Total | $3,196 | −$919 |
Gap vs. renting: $796 a month. Likewise, that’s down from $1,715.
MUDs are less common in North Texas. Instead, Public Improvement Districts do the same job in the growth corridors — namely Princeton, Anna, Celina, Melissa, Forney, Josephine, and much of the Alliance corridor. As a result, combined rates in new developments often land between 2.4% and 2.9%.
One more thing is worth knowing. DFW’s entry-level new construction in the outer ring often prices below the metro median. So if you find similar new product at $340,000 instead of $405,000, the whole analysis improves again.
The tax rate on a new-construction home can swing $200+ a month
MUD, PID, ESD, county, school. Because it’s all public record, pulling it takes me about ten minutes. So send me a community you’re looking at. Get your 15 minutes →
Rent vs. buy in Texas, owner vs. owner: what the rate alone is worth
This is the cleanest rent vs. buy in Texas comparison in the post, because nothing else is different. Namely, it’s the same down payment, the same loan, the same insurance, and the same buyer.
Ten-year net cost of owning
| Houston | Dallas–Fort Worth | |
|---|---|---|
| Path A — resale @ 6.67% | $354,659 | $415,825 |
| Path B — new build @ 2.99% | $224,850 | $270,565 |
| Difference | $129,809 | $145,260 |
Ten years of interest on the Houston loan comes to $211,154 at 6.67%, but only $89,826 at 2.99%. In short, that’s the whole story in two numbers.
Owner vs. renter, ten years
Houston
| Net 10-year cost | |
|---|---|
| Rent | ~$289,000 |
| Buy — Path A | $354,659 |
| Buy — Path B | $224,850 |
Dallas–Fort Worth
| Net 10-year cost | |
|---|---|
| Rent | ~$261,000 |
| Buy — Path A | $415,825 |
| Buy — Path B | $270,565 |
Where the rent vs. buy in Texas crossover lands
| Path A | Path B | |
|---|---|---|
| Houston break-even | past year 12 | ~4 years |
| DFW break-even | past year 15 | ~6 years |
Price growth needed to break even on rent vs. buy in Texas
Above all, this is the table to remember.
| Path A | Path B | |
|---|---|---|
| Houston, 5 years | 5.1%/yr | 0.5%/yr |
| Houston, 10 years | 3.6%/yr | −0.6%/yr |
| DFW, 5 years | 6.5%/yr | 2.3%/yr |
| DFW, 10 years | 5.0%/yr | 1.4%/yr |
Read the Houston 10-year cell again. At 2.99%, Houston values could fall six-tenths of a percent every year for a decade, yet buying would still beat renting. That’s not a rosy view of the market. Rather, it’s simply what happens when you cut your interest cost by more than half.
Naturally, these are metro-wide rent vs. buy in Texas models. Your own break-even year depends on your timeline, your credit, and your zip code, so let me run yours.
Four years is a very different bet than twelve
If you sat out because break-even felt too far away, then the buydown may have already moved it inside your timeline. Book your free 15 minutes →
The rent vs. buy in Texas fine print — read this part twice
Of course, I won’t hand you a 2.99% headline without the eight things that can quietly undo your rent vs. buy in Texas math.
1. Permanent buydown or temporary? This is the whole ballgame.
Every rent vs. buy in Texas number on Path B assumes a permanent buydown. That means 2.99% for the full 30 years, paid for with builder-funded discount points.
Many advertised programs are temporary instead. With a 3-2-1 or 2-1 structure, the rate steps back up. For example, on a 5.99% note rate with a 3-2-1, here’s the Houston payment schedule:
| Year | Rate | P&I |
|---|---|---|
| 1 | 2.99% | $1,426 |
| 2 | 3.99% | $1,615 |
| 3 | 4.99% | $1,816 |
| 4–30 | 5.99% | $2,029 |
So that’s a $603 monthly jump by year four. Basically, a temporary buydown is a bridge rather than a discount. It makes sense if you truly expect to refinance, but it’s a trap if you’re budgeting on year-one payments forever.
Ask one question: “Is this rate permanent for the life of the loan, or does it adjust?” Then get the answer in writing on the loan estimate. Alternatively, send me the flyer and I’ll read it for you — this takes about two minutes.
2. You qualify at the note rate, not the teaser rate
On a temporary buydown, FHA checks your income against the full note rate. Therefore you have to afford $2,029, not $1,426, and the lender will confirm it. That protects you. Still, it also means a temporary buydown won’t expand what you can buy. Instead, it only softens the landing.
3. FHA mortgage insurance at 3.5% down never goes away
This costs real money, and it isn’t optional. Because you’re putting less than 10% down, FHA mortgage insurance stays for the life of the loan. It never drops off, no matter how much equity you build. Over ten years, consequently, that’s roughly $17,300 in Houston and $20,300 in DFW — and I included it in every table above.
You have two exits. First, you can refinance into a conventional loan once you hit 20% equity. Second, you can put 10% down up front so the insurance ends at year 11. At a 2.99% rate, though, refinancing out won’t make sense for a very long time. So plan on paying it.
Then there’s the 1.75% upfront premium rolled into your balance. That’s why a $345,000 purchase creates a $338,751 loan on a $12,075 down payment. In other words, you start about $6,000 underwater against your purchase price. In a flat market, working that off takes roughly a year and a half.
4. Conventional 3% down is worth pricing against this
If your credit score is 680 or higher, then a conventional loan at 3% down is a real alternative. Usually the rate runs a bit higher than FHA on the same day, and underwriting is tighter. But the mortgage insurance drops off automatically at 78% loan-to-value, and there’s no upfront premium either.
Over a long hold, therefore, that difference can be worth more than a rate edge, and it can flip your rent vs. buy in Texas answer. Which loan wins depends on your score, your debt load, and how long you’ll stay. So price both. Any decent loan officer will run the side-by-side if you ask — or I’ll walk you through it in 15 minutes before you talk to one.
5. The buydown is probably priced into the house
Buying a permanent rate down from 6.7% to 2.99% costs somewhere between five and eight discount points. Obviously, nobody gives that away. Instead, it comes out of margin, out of the sticker price, or out of both.
So compare the builder’s discounted price against resale comps in the same zip, same square footage, and same school zone. If the new build sits 8% above similar resale, then part of that buydown is really you paying for your own rate through a bigger loan. It may still be the better deal, since a permanent rate edge usually beats a modest price premium. Even so, you should know which one you’re getting.
Honestly, this is the most useful thing I do for new-construction clients. Notably, it’s also not something a builder’s sales agent will bring up. Have me run the comps first.
6. You’ll probably have to use the builder’s lender
That’s how these programs work, and it’s completely legal. Because the discount is tied to using their lender, though, your leverage on fees is limited. So get a competing loan estimate from an outside lender, then compare the total — rate, points, origination, title, everything. Sometimes the buydown wins by a mile. Other times, however, the fee stack eats a chunk of it.
7. “2.99% APR” and “2.99% rate” are different numbers
APR includes fees, so a 2.99% APR means the note rate is actually below 2.99%. Most builder ads quote the note rate. Either way, confirm which one you’re looking at before you build a budget on it.
8. Your resale competition is the builder
Buy in a community that’s still selling, and in year three you’ll be listing against the builder’s leftover inventory — with their discounts, their warranty, and their model home. Naturally, that drags on early price growth. For that reason, I’d rather put a client in a community that’s 80% built out than one that’s 30%.
In fact, buying near the end of a phase is worth more than most people realize.
Eight items. Before you sign anything, I check all eight.
The comp analysis alone — builder price against resale in the same zip — has saved clients more than the buydown was worth. Free 15-minute review →
Rent vs. buy in Texas: factors that apply either way
The mortgage interest deduction probably does nothing for you
In 2026 the standard deduction is $32,200 for married couples filing jointly, or $16,100 for single filers. Meanwhile, our Houston Path B buyer pays roughly $10,000 in first-year interest at 2.99%, plus $8,280 in property tax — about $18,300 total. Because that falls short, a married couple takes the standard deduction and gets zero benefit.
Ironically, the better your rate, the less there is to deduct. The SALT cap did rise to $40,400 for 2026, which certainly helps at higher price points. Still, it can’t create deductions you don’t have. So run this by your CPA before it factors into your decision.
File your homestead exemption
The school district exemption is now $140,000, and the 10% yearly cap on assessed increases is the best protection Texas homeowners have. However, two traps come up constantly:
- The filing window runs January 1 through April 30. However, Texas law also lets you file late for up to two years past the delinquency date, so a missed deadline usually isn’t fatal. Meanwhile, Harris County (HCAD) mails confirmation postcards each December listing the exemptions already on your account. So check yours against what you actually expect to have.
- New construction buyers get hit in year two. For instance, you may close on a home still taxed as an empty lot, then get taxed at full value the following January. On a $345,000 house, consequently, that’s a swing of several hundred dollars a month in escrow. Worse, it arrives in month fourteen when nobody expects it. So budget for it at closing, not when the notice shows up.
I’ve written detailed guides on both the Dallas County (DCAD) and Harris County process. Alternatively, if you’d rather I check your dates and filing status directly, grab 15 minutes.
Insurance is better on new construction, but never cheap
Texas averages roughly $4,085 a year for $300,000 in dwelling coverage — about 61% above the national average. Houston runs higher because of hurricanes, while Dallas runs high because of hail. New construction does help, though. Specifically, a new roof, current code, and wind-resistant features usually cut 10% to 20%.
Here’s what still applies regardless:
- Percentage-based wind and hail deductibles, usually 1% to 5% of dwelling coverage on top of your standard deductible. On a $345,000 home, for example, a 2% wind/hail deductible means you pay the first $6,900 yourself. Worse, it never shows up in your monthly premium.
- Flood is excluded from every standard policy. In Houston, therefore, that isn’t optional thinking. NFIP policies average around $698 a year statewide, and since Harvey, flood zone status drives resale value directly.
- Your new-build discount fades. Because roof age is what Texas carriers look at first, many won’t renew shingle roofs past 15 to 20 years. Basically, year one is your cheapest year.
Since premiums vary this much by address, get a real quote before you go under contract. Or bring me the address and I’ll help you get one.
Protest your appraisal, every year
It’s free, it takes an afternoon, and it matters even more on new construction. After all, you’re being valued against a moving target in a community that’s still building.
On rent vs. buy in Texas, Path B is probably right for you if…
- You’re confident about four-plus years in Houston, or six-plus in DFW. That’s the crossover, and past it the advantage grows fast.
- You can get a permanent buydown rather than a 3-2-1. Otherwise the whole calculation changes, so you should treat it as a bridge to a refinance you may or may not get.
- $12,000 to $14,000 gets you to the table and still leaves reserves. Because FHA needs just 3.5%, the door is narrow enough to walk through. Unfortunately, that also makes it easy to walk through with nothing left, which is a different problem.
- You’re comfortable in the growth corridors — namely Katy, Cypress, Conroe, Rosenberg, and Baytown in Houston, or Princeton, Anna, Celina, Forney, Josephine, and Alliance in DFW. After all, that’s where the inventory and the deals are.
- The builder’s price checks out against resale comps. Notably, this is the step people skip.
Sound like you? Then let’s build your plan in 15 minutes.
On rent vs. buy in Texas, renting is probably still right for you if…
- You’re not confident about four years. Because closing costs run 8% to 11% round trip, nothing above saves you below the crossover.
- You’d close with no reserves left. FHA’s low down payment makes this easy to do. Consequently, people end up financing an HVAC failure at 24% APR. So budget six months of expenses after closing.
- You’re only being offered a resale at market rate. Since Path A loses to renting for more than a decade in both metros, the honest answer is wait.
- The note-rate payment on a temporary buydown makes you flinch. Then believe the flinch. Approval is not the same thing as affordability.
- You need to stay flexible. Job uncertainty, a relationship in flux, or a possible move all count. Renting keeps your options open, and right now it’s cheap — especially in DFW, where 40% of listings offer move-in deals.
Even so, take the call. Knowing what you’re waiting for — whether that’s a lease expiration, a credit score, or a community’s next phase — turns “not yet” into a plan instead of a stall. 15 minutes, free.
Where the rent vs. buy in Texas market sits, September 2026
Rates. Freddie Mac’s weekly average moved to 6.71% in early September, up from 6.66% the week before, and the highest since June 2025. Meanwhile, the MBA expects 6.6% to 6.7% through year-end, while Fannie Mae expects 6.7% to 6.8%. Both see little change through 2027. So if you’re waiting for market rates to hit 5%, then you’re waiting on a forecast nobody is currently making. And that’s exactly why the builder buydowns are worth this much right now. Ultimately, they’re a short-term result of how much unsold inventory builders are holding, not a permanent feature of the market.
Houston. Median price is flat at $345,000, while single-family sales are up 4.6% year over year. Days on market rose from 50 to 53. Townhome and condo supply, meanwhile, sits at 9.1 months. On the rental side, leases are up 12.1%, prices are flat, and 9,832 homes sit active.
Dallas–Fort Worth. Median at $404,900, down 1.7%. Inventory is down 4.7%, since sellers are pulling listings rather than cutting price. Median days on market is 62, against 56 nationally. Rents, however, are down across most measures, with heavy move-in deals.
In short, both metros are balanced to soft on both sides. That’s what makes rent vs. buy in Texas a genuinely open question right now. More importantly, it’s what makes the financing path the deciding factor instead of a footnote.
Because builder incentives move quarter to quarter, though, this window won’t stay open indefinitely. Check where it stands today.
What I tell clients about rent vs. buy in Texas
By now I’m wary of anyone with a universal answer on rent vs. buy in Texas, in either direction. After all, the apartment marketing that says “renting always wins” runs the same selective math as the agent who says “you’re throwing money away.”
Here’s what I actually believe. At 6.67% on a resale, renting is winning, so I’ll say so out loud. But at 2.99% on new construction with the same 3.5% down, buying wins by year four, and it isn’t close. My job isn’t to talk you into a house. Instead, it’s to work out which of those two sentences describes you, then check the eight items of fine print that decide whether the second one is real.
Let’s put real numbers on your rent vs. buy in Texas decision
Send me two or three communities or addresses you’re considering. Then I’ll come back with your own rent vs. buy in Texas numbers:
- The actual tax rate for that jurisdiction — namely MUD, PID, ESD, school, and county
- A real insurance quote, including the wind and hail deductible structure
- The builder’s price against resale comps in the same zip, same square footage, same schools
- Whether that buydown is permanent or temporary, in writing
- FHA versus conventional 3%, priced side by side for your credit profile
- Your personal break-even year, based on your real timeline instead of a metro average
Fifteen minutes. Free. No obligation, and no pitch if the answer is “keep renting” — because I’ve told plenty of people exactly that.
→ Book your 15-minute call at korywhiterealestategroup.com/go/15m
Rent vs. buy in Texas looks different in Houston, in Dallas, and anywhere between Frisco and Fort Worth. Ultimately, I’d rather tell you the truth about your math than sell you a house you’ll regret in year three.
Figures reflect data available as of September 2026 from HAR, NTREIS/Homes.com, Redfin, RentCafe, Zumper, Freddie Mac, HUD/FHA guidelines, and Texas insurance market reports. Buydown availability, rates, and terms vary by builder, community, and lender, and they change without notice. 2.99% is not a quoted offer, and not all buyers qualify. FHA loans require a minimum credit score, are subject to county loan limits and debt-to-income limits, must be used for a primary residence, and carry mortgage insurance for the life of the loan at 3.5% down. Tax rates, MUD and PID assessments, and insurance premiums are address-specific. This is general market analysis, not tax, legal, lending, or investment advice. Please consult a CPA on deduction questions, a licensed loan officer on financing, and a licensed insurance agent on coverage.
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