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Rent v Buy

Rent vs Buy in Memphis, TN

Memphis keeps entry costs low for a metro its size, with a median listing price of $304,495. That lower price narrows the gap with renting, but how fast buying catches up depends on local taxes and rents.

Rent averages $895 a month, and against that Memphis's prices put the price-to-rent ratio on the high side. That usually favors renting on the monthly math until appreciation and time tip the balance. Because Tennessee levies no state income tax, the mortgage-interest and property-tax write-offs only help at the federal level here.

How Memphis compares

  • Homes in Memphis cost 31% less than the national median of $443,255.
  • Rent in Memphis runs 59% lower than the U.S. median of $2,200/mo.
  • Homes in Memphis cost 29% less than the Tennessee median of $429,950.

What the numbers say

On both price and tax, Memphis is easy on the budget: a $304,495 median price and a 0.76% effective property tax rate. The all-in monthly cost stays near the mortgage payment, which tends to bring the buying payoff sooner.

Renters here pay about $895 a month ($10,740 a year), the baseline the buy case has to beat. Home prices in Memphis have climbed fast lately, near 8.2% a year. The calculator still uses the long-run 3 to 3.5% national average, since betting on a hot streak holding is a common way short-stay buyers lose money.

Homeowners insurance is modeled at the Tennessee average of $1,900 a year; swap in a real quote once you have a specific home.

What sets the rent-vs-buy math apart in Memphis

Memphis's price-to-rent ratio is about 28.4: the $304,495 median price divided by $895 a month in rent over a year. That is a high ratio, which means renting is often cheaper month to month and buying leans on appreciation and a long stay to pull ahead. As a single number, the ratio is a fast sanity check. It flags which side begins ahead, though your own inputs decide the final margin.

A high ratio means the monthly cost of owning in Memphis tends to sit above rent at first. Equity build and appreciation slowly turn that around, which makes your expected length of stay the deciding factor.

A handful of Memphis particulars matter once you look past the ratio alone. FedEx said in late 2024 that its Memphis World Hub launched a new 1.3 million-square-foot automated sort facility that can process up to 85,000 packages per hour during peak. Source. Memphis MSA population was 1,342,386 in 2023, 1,345,629 in 2024, and then 1,341,412 in 2025, showing a notably flat recent growth pattern. Source.

Want the calculator pre-filled with Memphis numbers? Open it below and the metro defaults load automatically.
Open with Memphis defaults

Home Purchase

Enter details about the home you're considering buying

Quick fill:
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Renting

Enter details about your rental alternative

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Time Horizon & Market

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Detailed mode adds 17 more inputs including advanced assumptions.

Buying is cheaper over 7 years

by $31,485

Buying comes out ahead, though the margin is meaningful only if you stay the full term and your assumptions hold roughly true.

High Confidence

The result is robust across small changes to your inputs.

Total cost of buying

$387,138

Average $4,609 per month over 7 years

Total cost of renting

$207,949

Average $2,476 per month over 7 years

Equity Built

$245,691

What you've paid down on the loan principal over 7 years.

Net Sale Proceeds

$211,339

What you'd walk away with after selling, minus closing costs.

Investment Growth

$65,204

What the down payment could grow to if invested instead of used to buy.

This chart shows total dollars spent on each path, month by month. With your inputs and time horizon, renting stays ahead the entire time.

Frequently Asked Questions

Memphis posts a median listing price of $304,495, 31% below the national median of $443,255. A headline price tells you little on its own: the price-to-rent ratio of 28.4 is what shows whether buying is dear or cheap next to renting the same home.

On monthly cost alone, renting is usually cheaper in Memphis right now, because the price-to-rent ratio of 28.4 is on the high side. Buying tends to win only over a longer hold, once equity build and appreciation outweigh the higher monthly carrying cost. Run your own stay length in the calculator to see where the lines cross.

The effective property tax rate in Memphis is 0.76%. On the $304,495 median home that runs roughly $193 a month, or $2,314 a year, beyond principal, interest, and insurance, a fixed owning cost renters skip.

Work it from a 28% housing-cost ratio: on Memphis's $304,495 median home with 20% down at 7.0% over 30 years, the monthly pieces come to roughly principal and interest $1,621, property tax $193, and insurance $158, about $1,972 in total. That lines up with gross household income near $84,507, and at 20% down there is no PMI. The affordability calculator takes your own figures.

Seldom. A $304,495 home in Memphis carries about $12,180 in buy-side costs and $18,270 to sell, roughly 8 to 12% round-trip. Three years of price growth rarely makes that back, so for a short stay renting is generally the safer financial call, as in most U.S. markets.

By Barron Hansen, Founder · Last reviewed

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