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A video from a mortgage banker has been making the rounds with a simple message: don’t let anyone talk you into buying a home in this market. Not with these interest rates. Not with these prices. Renting, he says, makes more financial sense right now.
Watch:
It’s a strong take, and it gets attention for a reason. Mortgage rates are up, and many buyers feel squeezed.
However, the rent vs buy in Texas question doesn’t have a one-size-fits-all answer. It never has. So instead of arguing with a headline, let’s run the numbers, look at history, and be honest about where the video has a point and where it falls apart.
The short answer: “Never buy right now” is wrong as a blanket rule. For some Texans, renting is the better financial move today. For others, buying still makes sense, even at 7%. The difference comes down to your price range, how long you’ll stay, what comparable rent costs, and your cash cushion.
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Where Are Mortgage Rates Right Now?
The average 30-year fixed mortgage rate was 7.03% for the week of September 24, 2026, according to Freddie Mac’s Primary Mortgage Market Survey. That’s up from 6.95% the week before and 6.30% a year earlier.
So yes, borrowing costs more than it did last year. Nobody should pretend otherwise.
Meanwhile, Texas prices have flattened. The statewide median price was $339,000 in July 2026, unchanged from a year earlier, with about 5.5 months of inventory, according to Texas A&M Real Estate Research Center data reported by Republic Title. Nationally, the median existing-home price was $429,100 in August 2026, per the National Association of REALTORS®. That’s roughly $90,000 more than the Texas median.
If you want the full background on how rate moves affect Texas buyers, read our breakdown of Texas mortgage rates and the Fed.
Were Mortgage Rates Higher in the 1980s?
Yes, much higher. In 1985, the average 30-year fixed rate was 12.43%, based on Freddie Mac annual averages. In 1981, it averaged 16.63%.
Year Average 30-Year Fixed Rate
1981 16.63%
1984 13.88%
1985 12.43%
1986 10.19%
Sept. 24, 2026 (weekly) 7.03%
Source: Freddie Mac PMMS historical data. 1981 to 1986 figures are annual averages.
People still bought homes at those rates. Many of them built real wealth through homeownership over the following decades.
That’s the argument people often make when someone says “don’t buy at 7%.” It’s a fair point, but it’s only half of the story. To be objective, we have to look at the other half.
Is Buying at 7% Today the Same as Buying at 12% in 1985?
No. Rates were higher in 1985, but home prices were much lower compared to income. That’s the part most rate-history posts leave out.
According to FRED and household income data compiled by Visual Capitalist, the U.S. median home price in 1985 was about $82,800 while median household income was $23,620 (see the U.S. Census Bureau’s 1985 income report). That’s a price-to-income ratio of about 3.5x.
Today, the national median price of $429,100 is a little over 5x median household income. In Texas, the $339,000 median compared with the state’s median household income of $76,292 (U.S. Census Bureau QuickFacts, 2019 to 2023 dollars) works out to about 4.4x.
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Here’s what that means for the monthly payment. We used the same setup for each scenario: median price, 10% down, 30-year fixed.
Scenario Price Rate Principal & Interest P&I as % of Median Income
U.S., 1985 $82,800 12.43% $791/mo About 40%
U.S., Aug. 2026 $429,100 7.03% $2,577/mo About 37%
Texas, Jul. 2026 $339,000 7.03% $2,036/mo About 32%
KWREG example math. Principal and interest only. Excludes taxes, insurance, PMI, and HOA.
The takeaway surprises a lot of people. Measured by principal and interest alone, a median-income household in 1985 was spending a bigger share of income than a median-income Texas household would today.
Still, that’s not the whole picture. Texas buyers also carry property taxes, homeowners insurance, and sometimes HOA, MUD, or PID costs. Those can add hundreds of dollars a month. In many Texas suburbs, taxes and insurance are the real budget breakers, not just the rate.
Bottom line: 1985 proves people can buy and build wealth with high rates. It does not prove today is “easy.” Buyers then fought rates. Buyers now fight prices, taxes, and insurance.
Where the “Just Rent” Video Has a Point
Being objective means giving the other side its due. There are real situations where renting is the smarter financial move right now.
• You might move within 2 to 3 years. Selling costs and closing costs can wipe out early equity.
• You’d drain your savings to close. Buying with no emergency fund turns one AC failure or job change into a crisis.
• Comparable rent is much lower than the true cost of owning. In some areas, renting the same house costs far less than owning it in the first few years.
• Your income isn’t stable yet. A new job, a business ramp-up, or uncertain plans can make a 30-year commitment risky.
• Rents are flat or falling locally. Apartment rents in Dallas averaged $1,592 in August 2026, down 0.92% year over year. Houston averaged $1,344, down 1.43%, per RentCafe. Softer rent strengthens the case for renting in the short term.
If any of those describe you, renting for now isn’t a failure. It can be a smart, deliberate choice.
Where the “Never Buy Right Now” Advice Falls Apart
On the other hand, telling everyone not to buy ignores how homeownership actually builds wealth. Here’s what the blanket statement misses.
1. Comparing Rent to the Full Mortgage Payment Is the Wrong Comparison
Part of every mortgage payment is principal. That money isn’t spent. It becomes equity you keep.
A fairer comparison looks at unrecoverable costs: the money you never get back. For a homeowner, that’s mortgage interest, property taxes, insurance, maintenance, PMI, and the opportunity cost of the down payment. For a renter, it’s rent.
Here’s a Texas example using the $339,000 statewide median, 10% down, and a 7.03% fixed rate.
Year 1 Unrecoverable Cost Monthly
Mortgage interest $1,779
Property tax (2.0% assumed) $565
Maintenance (1% of value per year, assumed) $282
Homeowners insurance ($2,800/year, assumed) $233
PMI (0.5% of loan, assumed) $127
Opportunity cost on down payment (4% return, assumed) $113
Total About $3,100
KWREG example math. Tax, insurance, maintenance, and PMI vary widely by county, property, and credit profile. Year 1 principal paydown of about $257 per month is excluded because it builds equity.
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So in this example, if renting a comparable house costs well under $3,100 a month, renting wins on pure cost in year 1. If comparable rent gets close to that number, buying starts to look better, especially over time.
Notice that this is a comparison to a similar house, not to an average apartment. A 3-bedroom single-family rental usually costs more than the apartment averages above.
2. Time Changes Everything
Your fixed-rate principal and interest payment stays the same for 30 years. Rent doesn’t make that promise. Taxes and insurance can still rise for owners, but the biggest piece of the payment is locked.
Meanwhile, principal paydown speeds up every year. In our example, the loan balance drops from $305,100 to about $287,300 after 5 years, even with zero appreciation.
Here’s what happens if that buyer sells after 5 years and pays about 7% in selling costs.
Home Value Growth Per Year Value After 5 Years Cash Left After Sale
0% $339,000 About $27,983
2% About $374,283 About $60,796
3% About $392,994 About $78,197
4% About $412,445 About $96,287
Starting down payment: $33,900. Example only, not a forecast. Appreciation is never guaranteed, and values can fall.
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With flat prices, this buyer gets back less than the down payment after 5 years. With modest growth, the picture changes quickly. That’s why time horizon matters more than any single rate headline.
3. Waiting Has Its Own Risk
Rates could fall. They could also rise. Rates went from 6.30% to 7.03% over the past year, which shows how quickly the market can move in either direction.
Prices are a separate variable. When rates drop, more buyers often return to the market at the same time, which can mean more competition. Nobody can promise which way either one will go.
The 1980s offer a useful example. A 1985 buyer at 12.43% had a payment of about $791 on our example loan. A year later, rates averaged 10.19%. Refinancing that balance at 10.19% would have lowered principal and interest to about $666 a month, before refinance costs. That worked out for those buyers, but refinancing is never guaranteed. It depends on future rates, your credit, your income, and your home’s value.
4. The Negotiation Window Is Real Right Now
Higher inventory gives buyers more leverage. In Texas, buyers today often have more room to negotiate on price, repairs, closing costs, and builder incentives than they did in tighter markets. A seller-paid rate buydown or a builder rate incentive can change the monthly math significantly.
If you’re comparing options, our guide to types of mortgage loans explains how FHA, VA, conventional, and other programs affect payments.
Price. Location. Build Type.
In today’s Texas market, buyers often get to prioritize 2 of 3:
• Location + new construction may cost more.
• Price + new construction may require moving farther out.
• Price + location may require considering resale.
This is often where the rent vs. buy decision really gets made. A buyer who insists on all three at 7% may find renting makes more sense. However, a buyer who is flexible on one of them may find a payment that works.
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How to Decide: Rent or Buy in Texas?
Instead of following a viral rule, run your own numbers with these questions.
1. How long will you stay? Under 3 years often favors renting. Five or more years gives ownership more time to work.
2. What does a comparable home rent for? Compare the same size, area, and type, not an apartment to a house.
3. What’s your true monthly cost to own? Include taxes, insurance, HOA, and any MUD or PID. Our guide to the hidden costs of buying a home in Texas covers what buyers commonly miss.
4. Will you still have savings after closing? A cushion of several months of expenses protects you from surprises.
5. Is your payment comfortable at today’s rate? Plan on today’s payment. Treat a future refinance as a bonus, not a strategy.
6. Are you pre-approved? A real mortgage pre-approval shows what you can actually afford, not what a calculator guesses.
The CFPB’s home buying tools are also a good, neutral place to check loan estimates and compare offers.
📘 Download the Texas Home Buyer’s Guide
So, Is the Video Wrong?
Partly. The video is right that buying isn’t automatically the best move for everyone, and that rates and prices make ownership harder today than a few years ago.
But “don’t buy in this market” ignores the details that actually decide the answer: your time horizon, your local rent, your total cost to own, and your savings. History shows that people have bought at much higher rates and still come out ahead over time. History also shows that prices relative to income are higher now, which is why the math deserves a closer look.
The honest answer is not “always buy” or “always rent.” It’s “run your numbers.”
If you’d like help comparing your actual rent with the real cost of owning in your part of Texas, we’re happy to walk through it with you. No pressure, just the numbers.
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Frequently Asked Questions
Is it better to rent or buy in Texas in 2026?
It depends on how long you’ll stay, what comparable rent costs, and your total cost of ownership. Renting often wins for shorter stays. Buying tends to make more sense when you plan to stay 5 years or longer and the payment fits comfortably.
What was the average mortgage rate in 1985?
The average 30-year fixed mortgage rate was 12.43% in 1985, according to Freddie Mac annual data. Rates averaged 16.63% in 1981 and fell to 10.19% by 1986.
Was buying a home easier in 1985 than today?
Not exactly. Rates were higher in 1985, but the median home cost about 3.5 times median household income. Today, the national ratio is above 5 times income, while Texas is closer to 4.4 times.
What are mortgage rates right now?
The average 30-year fixed rate was 7.03% for the week of September 24, 2026, according to Freddie Mac. Your actual rate depends on credit, down payment, loan type, and points.
Should I wait for mortgage rates to drop before buying?
Waiting can make sense if you aren’t ready financially or plan to move soon. However, no one can predict rates or prices. If you buy now, choose a payment that works at today’s rate and treat any future refinance as a possible bonus.
How long should I own a home to make buying worth it?
Many buyers use about 5 years as a general guideline, because selling costs can erase early equity. The right timeline depends on price changes, your rate, and how much you put down.
Is rent really “throwing money away”?
No. Rent buys housing, flexibility, and fewer maintenance responsibilities. Owners also have unrecoverable costs, such as interest, taxes, insurance, and upkeep. The fair comparison is rent versus those unrecoverable ownership costs.
