Across 696 metros with direct price, rent and tax evidence, the baseline break-even threshold is 3.8% annual appreciation. That figure is not a prediction. It is the growth rate that makes two modeled ending balances equal after the same 7-year period.
The owner side begins with a 20.0% down payment, pays principal and interest at the Freddie Mac national rate, carries measured local property tax plus explicit maintenance and insurance assumptions, then sells after transaction cost. The renter side starts with the cash that would have gone to the down payment and buyer closing costs, earns the printed alternative return, and receives the monthly cost difference when ownership is more expensive.
That treatment matters because principal is not simply thrown away: it becomes home equity. Rent is not an asset, but a renter can still retain and invest capital. The comparison therefore ends with buyer equity versus a renter portfolio, not mortgage payment versus monthly rent.