Southern California tenants enjoy noteworthy savings over homeownership – even if they’d purchase a condominium.
Why? The gap between these housing costs has doubled over the past 10 years.
One of my recent columns upset certain ownership fans – mainly folks in the real estate transaction business – because it showed that, by comparing estimates of rents to overall ownership costs, a tenant may see significant short-term and medium-term savings compared with becoming a homebuyer.
One of my critics’ gripe: A house, historically three-quarters of all purchases, offers amenities like extra living and outdoor space that rental units typically don’t provide.
So my trusty spreadsheet attempted to level the playing field by redoing the math for six local counties by estimating renting’s advantage against a condo, the housing market’s lower-cost and more apartment-like option.
Zillow’s monthly local rent estimates – tracking what landlords charge for apartments and houses – were stacked up against Southern California’s condo expenses, driven by price data from Attom. That’s a buyer paying the loan – assuming current rates, mortgage insurance and a 10% down payment – as well as property taxes, home insurance and the condo owner’s bane: association fees.
What did we learn, as of July 2026?
A typical Southern California tenant pays $2,860 monthly, a cost that’s grown an average 4.5% yearly over 10 years.
Meanwhile, a theoretical condo buyer would pay $4,940 monthly for a unit that costs $660,000. This buyer’s estimated house payment has surged at a 7.8% annual clip since 2016. Condo sale prices jumped while historically cheap mortgage rates vanished.
You can quibble with the math, but the trend is clear.
In July 2026, there’s a 42% gap favoring tenants. Ten years earlier, renting saved only 21%.
Yes, tenants, your advantage doubled.
Long-run advantage
These aren’t small or short-term savings.
Let’s assume local rents rise at the same pace they did over the last 10 years. It would take 12 years for what a tenant pays now to equal July 2026’s “fixed” monthly purchase expenses.
Those savings – running to 2038 – would roughly equal $155,000. That assumes no increases in an owner’s taxes, insurance, or association fees.
Oh, and don’t forget that $66,000 down payment needed to make the buying example work.
Now, owners may get tax deductions for the interest paid on the mortgage, which can lower the effective monthly costs.
Also, owners can also benefit from potential price gains. The median-priced Southern California condo grew 62% in value during the past 10 years – going from $408,000 to $660,000.
However, consider that this same condo value benchmark was flat in the previous 10 years. Zero gain? Well, that decade included the Great Recession.
Of course, folks who value stability additionally get the emotional benefit of knowing they control their housing future with ownership.
Nevertheless, renting’s financial edge is worth noting, especially when buying is so unaffordable today.
A household income of $180,000 is required to buy a Southern California condo and keep July 2026’s monthly payments at one-third of income. In 2016, just $84,000 was needed.
Big stretch
Who stretches their finances like that in 2026? Look at Attom’s sales figures.
In the year ending in July, 36,310 condos sold across Southern California. That’s the fourth slowest pace in data reaching back to 2005 – with the three slowest periods coming from the previous three months.
July was 30% slower than the 21-year average pace for Southern California’s condo sales. And it was 4% below the worst results during the Great Recession’s real estate wreck.
Don’t like my rent vs. buy numbers? House hunters’ actions suggest condo ownership doesn’t add up for them either.
“Tenant Talk” by Jonathan Lansner is a peek into the world of renting. Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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October’s most popular Southern California real estate stories …
No. 1: Dana Point’s Ritz-Carlton sells for estimated $600 million
No. 2: Laguna Beach estate sells for $82.6 million, second-highest OC home sale
No. 3: Newport Beach’s 100-year-old landmark Lovell Beach House seeks $18.8 million
No. 4: Southern California homebuying crashes to 2nd slowest pace on record
No. 5: ‘New Girl’ star Jake Johnson lists Pasadena home for $3.3 million
No. 6: 12 Orange County ZIPs on costliest housing list, 3rd most in nation
No. 7: Palos Verdes Estates oceanfront compound sells for record $24.3 million
No. 8: Home prices drop in 42% of Orange County
No. 9: Long Beach mid-century duplex photographed by Julius Shulman seeks $1.5 million
No. 10: Gains in California home prices continue to evaporate
No. 11: Real estate news: Costa Mesa apartment complex fetches $9.4 million
No. 12: Real estate news: Placentia shopping center trades hands for $66 million
No. 13: 69 California ZIP codes make priciest-housing list, the most of any state
No. 14: Laguna Beach’s ridge-cresting ‘Wave House’ seeks $7.9 million
No. 15: Rents are rising in 58% of Southern California cities
