Renting vs. Owning: What Really Builds Wealth in Bethesda and Beyond

Renting vs. Owning! Is this what you are contemplating for the New Year? Renting can feel like the simpler and more affordable option—especially these days. No repairs, no property taxes, no worrying about interest rates. You write the check each month and go about your life.

But here’s what often gets overlooked: renting doesn’t build your financial future. Meanwhile, homeowners—right here in Bethesda and throughout the DC metro area—grow their net worth simply by owning their home. When you are considering renting vs. owning, you need to look at the short-term consequences and the long-term benefits.

So if you’ve been wondering whether buying is still worth it in this market, the long-term math may be clearer than you think.

Renting vs. Owning: The Real Difference

When you rent in Bethesda (or anywhere in the DC area,) your money goes straight to your landlord, and that’s the end of the story.  (As a landlord, I always feel like I should send my tenants a thank you note!)  When you own, part of your monthly payment comes back to you in the form of equity—the wealth you build as your home appreciates and your mortgage balance declines.

So while renting may feel easier or even cheaper right now, there’s a long-term cost: you’re not building wealth.

A recent analysis by First American compared the true financial impact of renting versus owning. They looked at all the real numbers—mortgage payments, taxes, insurance, repairs—against the equity gained through appreciation and principal paydown. And they did this across multiple key points in the market:

• 2006: the height of the housing bubble

• 2015: a stable market

• 2019: just before the pandemic boom

• 2022: when mortgage rates jumped

In each time frame, two things were true: renters ended up losing money over time. And homeowners gained it.

Here’s some data so you can see this play out. Each color represents one of the key time frames. The solid lines show the buyer’s investment over time and how their net worth actually grew the longer they lived in their home. The dashed line represents the renter’s investment. In the end, they sank more and more cash into renting without gaining any financial benefit.

Basically, homeowners come out ahead. And the analysis shows that’s even after you factor in the other expenses that come with homeownership, like insurance, repairs, and property taxes. And that’s the case for every time frame First American looked into.

✅ Renters lost wealth over time
✅ Homeowners gained it

Even with fluctuations in interest rates and home prices, homeowners consistently came out ahead.

The message is clear:

Time in a home builds wealth. Time renting doesn’t.

What About Affordability in 2025?

You may be thinking, “Sure, but buying in Bethesda feels out of reach right now.” And that’s completely understandable. The last few years have been challenging for buyers.

But we are finally seeing some positive movement:

• Mortgage rates have come down from their peak

• Prices in some segments of the Bethesda and DC metro market are softening

• Incomes have been rising

• Zillow reports that typical monthly payments are slightly more manageable compared to this time last year

Buying isn’t suddenly easy, but it is getting more attainable. And historically, those who step into the market—even during imperfect times—see the long-term payoff.

The Bottom Line

Renting may feel more affordable today, but owning is what builds real, lasting wealth. If you’re thinking about your financial future—or even just dreaming about having a home of your own—this might be the moment to start exploring your options.

If you’re curious what buying in Bethesda could look like for you, let’s talk. No pressure, no rush. Just clear, honest guidance based on years of helping people plant roots right here in our wonderful community.

I’m always here to help you figure out your next move.