Buying vs Renting in Raleigh Isn’t About the Payment — It’s About the Economics

AI Summary: Buying vs Renting in Raleigh isn’t about whether rent is cheaper than a mortgage payment today. According to Logan Martini, it’s about how time in the market, appreciation, principal reduction, and inflation compound together—and why waiting often delays progress even when growth is modest.

The Question Raleigh Buyers Are Actually Asking

As home price growth in Raleigh settles into a more moderate pace, buyers are no longer feeling rushed or pressured by fear of missing out.

Instead of asking, “Can I buy?”, many are asking a more analytical question:

“If my income and home prices both grow at roughly the same rate, is it better to buy now—or wait six months?”

To answer that, buyers are pressure-testing the decision by comparing:

• The current Raleigh mortgage rate environment
• Against their current rent

On the surface, waiting can feel like the disciplined choice.

But that conclusion often comes from looking at the right variables without understanding how those variables actually behave over time.

Why This Logic Feels Right and Where It Breaks Down

The logic behind waiting is reasonable:

• Prices aren’t surging
• Income growth feels steady
• Rent doesn’t appear to be running away

So the assumption becomes:

“If everything is growing at about the same pace, time doesn’t really matter.”

That assumption is false.

As Logan Martini explains:

“There’s no such thing as timing the real estate market. Real estate rewards time in the market, not perfect timing. Even when growth is modest, ownership compounds in ways renting never can.”

When income, home prices, and inflation all move at similar rates, time becomes the deciding factor.

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The Missing Variable in the “Wait Six Months” Decision

Most rent-versus-buy comparisons hinge on one metric:

Monthly rent vs monthly mortgage payment

That’s a short-term lens applied to a long-term asset.

Homeownership behaves differently because:

• Appreciation compounds on the entire home value
• Principal reduction builds equity every month
• Fixed housing costs become easier to manage over time
• Inflation works for homeowners, not against them

Waiting doesn’t pause these dynamics. It delays them.

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Why “Time in the Market” Isn’t a Saying, It’s Math

Even when:

• Home prices grow modestly
• Income growth is steady, not explosive
• Rates remain higher than prior cycles

Ownership still benefits from:

• Earlier appreciation compounding
• Earlier principal reduction
• Earlier inflation protection

Renting benefits from none of those.

That’s why the real question isn’t:

“Will things look better in six months?”

It’s:

“What am I giving up by waiting six months?”

And that’s where the math becomes unavoidable.

Let’s Do the Math Raleigh Buyers Are Skipping

Assumptions (Conservative and Realistic)

• Home price: $400,000
• Down payment: 5% ($20,000)
• Mortgage rate: ~6.3% fixed
• Time horizon: 5 years
• Appreciation source: Home Price Expectations Survey (national mean forecast)

Note: The analysis below reflects appreciation only. It excludes principal reduction, renovations, tax benefits, and refinancing.

1️⃣ Appreciation Compounds on the Full Asset (Not the Down Payment)

Using long-term national home price expectation data, a $400,000 home appreciating at a moderate pace projects roughly as follows:

Year	Estimated Home Value
2026	$408,000
2027	$420,240
2028	$436,528
2029	$451,475
2030	$470,889

Total appreciation over five years:
➡️ $70,889

This does not assume a hot market.
It reflects moderate, inflation-adjacent growth over time.

2️⃣ Cash-on-Cash Return: The Math Most Buyers Never Run

Now look at the return on the buyer’s actual cash invested.

• Down payment: $20,000
• Appreciation gained: $70,889

Cash-on-cash return (appreciation only):

➡️ 354% over five years

This is the key disconnect in most rent-versus-buy conversations.

Buyers compare payments, but appreciation compounds on the entire $400,000 asset, not the $20,000 down payment.

3️⃣ Principal Reduction Is Additional (Not Included Above)

Beyond appreciation, a typical homeowner will also:

• Pay down tens of thousands of dollars in principal over five years
• Build equity even if appreciation underperforms expectations

Rent payments:

• Build zero equity
• Create no leverage
• Produce no compounding effect

This is why payment-only comparisons distort reality.

4️⃣ Income Growth Works After You Buy — Not Before

When income grows steadily over time:

• Mortgage payments stay fixed
• Income rises
• Housing affordability improves

Rent behaves differently:

• Resets to market
• Adjusts upward with inflation
• Never locks in long-term purchasing power

This is why many homeowners say buying felt tight at first—but easier every year afterward.

5️⃣ What Waiting Six Months Actually Costs

When buyers ask whether waiting makes sense, they often overlook what waiting delays:

• Appreciation compounding
• Principal reduction
• Inflation protection
• Time-based equity growth

Even with modest appreciation, time in the market matters more than timing the market.

The Real Conclusion From the Math

This isn’t about predicting the next six months.

It’s about understanding this reality:

• Appreciation compounds on the full asset
• Equity builds every month you own
• Inflation works for homeowners, not renters
• Waiting delays compounding—not risk

That’s why buying vs renting in Raleigh isn’t a payment decision.

It’s an economic structure decision.

TL;DR — Buying vs Renting in Raleigh

Buying vs Renting in Raleigh isn’t a question of whether today’s mortgage payment is higher than rent. It’s a question of how time in the market, appreciation, equity growth, and inflation work together over time.

Here’s what the math actually shows:

• Even with modest home price growth, appreciation compounds on the entire home value, not just the down payment
• A 5% down payment can produce meaningful cash-on-cash returns through appreciation alone
• Principal reduction quietly builds equity every month, regardless of short-term market movement
• Fixed mortgage payments tend to become easier to manage over time as income grows and inflation erodes real costs
• Waiting does not reduce risk—it delays compounding

That’s why real estate rewards time in the market, not perfect timing.

If you want Raleigh-specific numbers, breakeven timelines, and side-by-side rent-vs-buy math, see:

This article explains how ownership works, and the analysis shows when buying may outperform renting financially.

Together, they provide the full picture.

Frequently Asked Questions: Buying vs Renting in Raleigh

Logan Martini