The New Math of Renting vs. Buying in Solano County

Bottom Line Up Front: With median home prices around $585,000 and average rent at $2,275, the breakeven point in Solano County is approximately 4-5 years. Despite higher mortgage rates, homeownership still builds significant wealth over time through equity gains and tax benefits.

If you're sitting in a Fairfield coffee shop scrolling through Zillow while your rent statement sits unopened on your kitchen counter, you're not alone. With mortgage rates hovering around 6.73% and rents continuing their relentless climb, many Solano County residents are wondering: Does buying still make financial sense?

The answer might surprise you.

The Current Market Reality

Let's start with the numbers that matter. Solano County's median home price hit $585,000 in May 2025, up 0.9% from last year, while the median rent sits at $2,275, well above the national median of $1,469.

Breaking Down the Real Costs:

For a typical 3-bedroom home in Solano County:

• Purchase price: $585,000
• Monthly rent equivalent: $2,275-$2,500
• Down payment (10%): $58,500
• Monthly mortgage payment (with 6.73% rate): ~$3,420 (principal, interest, taxes, insurance)

At first glance, renting seems like the obvious winner since you're saving over $1,000 monthly! But this surface-level math misses the bigger picture.

The Breakeven Analysis: When Numbers Tell the Real Story

Here's where the "new math" gets interesting. When we factor in equity building, tax benefits, and long-term appreciation, the breakeven point arrives faster than you might expect.

Year 1-2: Renting Wins The upfront costs of homeownership create an initial gap that favors renting due to down payment, closing costs, and moving expenses.

Year 3-4: The Tipping Point This is where homeownership begins flexing its financial muscle:

• Principal paydown: $8,000-10,000 annually
• Tax benefits: $3,000-5,000 annually (depending on income bracket)
• Appreciation: Even modest 2-3% annual gains add $11,000-17,000 in equity

Year 5+: Homeownership Pulls Ahead By year five, the typical Solano County homeowner has built approximately $75,000-$100,000 in net equity while the renter has accumulated zero housing wealth.

Real Local Examples: The Fairfield Factor

Let's examine actual scenarios from recent Solano County transactions:

The Fairfield Starter Home Fairfield's median home price is $600,000, with many quality starter homes available in the $550,000-$650,000 range. A typical 3-bedroom rental in the same neighborhoods runs $2,400-$2,800 monthly.

For a $575,000 home with 10% down:

• Monthly payment: $3,450
• After 5 years: $85,000+ in equity vs. $0 in rental equity

The Vacaville Investment Vacaville offers slightly more affordable options, with good homes in the $520,000-$580,000 range. Rental prices vary widely, with most family homes renting for $2,200-$2,600.

The Hidden Costs (Both Sides)

Homeownership Reality Check:

• Maintenance: 1-2% of home value annually ($5,850-$11,700)
• Property taxes: ~1.2% annually ($7,020 on median home)
• HOA fees: $100-400 monthly (where applicable)
• Potential special assessments

Renting's Hidden Expenses:

• Annual rent increases: 3-5% typical
• Renter's insurance: $200-400 annually
• No tax deductions or equity building
• Limited control over living space

The Wealth-Building Difference

Here's where the math becomes compelling for homeownership. Over a 10-year period in Solano County:

Homeowner Wealth Building:

• Principal paydown: ~$95,000
• Appreciation (3% annually): ~$185,000
• Tax savings: ~$40,000
• Total wealth gain: ~$320,000

Renter Wealth Building:

• Equity gained: $0
• Money available for other investments: Variable
• Net housing wealth: $0

When Renting Still Makes Sense

Homeownership isn't always the answer. Renting remains the better choice if you:

• Plan to move within 3-4 years
• Have unstable income or employment
• Prefer flexibility and minimal maintenance responsibility
• Can consistently invest the difference in higher-return vehicles
• Don't have adequate emergency funds post-purchase

Strategic Timing in Today's Market

The Good News: 40.4% of homes in Solano County sold below asking price last month, giving buyers negotiating power. Homes are taking an average of 37 days to sell, up from 33 days last year, indicating a more balanced market.

The Rate Reality: While 6.73% feels high compared to pandemic-era rates, it's historically normal. Experts don't expect rates to return to the 2-3% range in our lifetimes, but gradual decreases to around 6% are possible if inflation continues to moderate.

Making Your Decision: A Practical Framework

Choose Homeownership If:

• You plan to stay 4+ years
• You can comfortably afford the monthly payment
• You have 6+ months of expenses saved post-purchase
• You value stability and building equity

Choose Renting If:

• You prioritize flexibility
• You're unsure about long-term plans
• You can invest the difference consistently
• You prefer predictable monthly costs

The Bottom Line

In Solano County's current market, homeownership typically becomes financially advantageous around the 4-5 year mark, assuming normal appreciation and stable employment. While the upfront costs are substantial and monthly payments higher than rent, the long-term wealth-building potential remains compelling.

The "new math" of renting vs. buying isn't just about monthly payments. It's about long-term financial strategy, lifestyle preferences, and building generational wealth. With Solano County home values at $581,200 and a relatively stable market, those able to make the commitment often find homeownership rewarding both financially and personally.

Ready to run your own numbers? The right choice depends on your unique circumstances, but now you have the framework to make an informed decision. For a comprehensive guide to navigating the home buying process in today's market, download our Complete Home Buyer's Guide.

Market data current as of July 2025. Individual results may vary based on specific properties, creditworthiness, and market conditions. Consult with financial and real estate professionals for personalized advice.