December 2025 Real Estate Update: Renting vs. Buying and What It Means Heading Into 2026

As we wrap up the year, many conversations naturally turn to housing. Whether it’s at holiday gatherings or year-end planning discussions, one question keeps coming up: Is it better to rent or buy right now?

The December 2025 Monthly Market Report from Keeping Current Matters sheds helpful light on this topic, especially as affordability continues to be top of mind for buyers across Silicon Valley and beyond.

Let’s break down what’s happening and how it may impact your next move.

Renting Is Cheaper Monthly: But That’s Only Part of the Story

According to Bankrate, renting is currently cheaper than owning in all 50 of the largest U.S. metro areas. On the surface, that makes renting feel like the safer option, especially with higher mortgage rates and rising costs like property taxes, insurance, and maintenance.

And that perspective makes sense. Everyone needs a place to live, and for many households, renting feels more manageable month to month.

But the monthly cost isn’t the full picture.

Homeownership Still Builds Long-Term Wealth

One of the most important insights from this report is how equity changes the math over time.

While owning a home can feel more expensive upfront, equity growth can offset a significant portion of the long-term cost of ownership. As home values rise, that equity works in your favor. In some cases, the equity gained can exceed the total cost of owning the home over time.

This is why homeownership remains the number one way Americans build wealth. Rent payments leave your account each month, but mortgage payments contribute to something you own.

That long-term benefit is often overlooked, especially when affordability conversations focus only on the short term.

Affordability Is Slowly Improving

There’s also some encouraging news. Affordability is beginning to improve across much of the country. According to First American, most major markets have seen year-over-year affordability gains, and momentum is building.

Zillow recently reported that affordability has reached a three-year high, thanks to a combination of slightly lower mortgage rates and increased housing inventory.

This doesn’t mean homes are suddenly cheap, especially in Silicon Valley. But it does mean buyers have more opportunities today than they did a year ago.

Inventory Is Back to Pre-Pandemic Norms

Another important shift: housing inventory has climbed back to levels we haven’t seen since 2019.

There are now over one million active listings nationwide, giving buyers more options and more negotiating power. Homes are also taking longer to sell, with days on market returning to pre-pandemic norms.

This is a healthier, more balanced market and one that favors preparation and strategy over urgency.

Price Reductions and Seller Incentives Are More Common

As inventory increases, we’re seeing more price adjustments and incentives, especially from home builders. Many sellers are becoming more flexible, particularly during the fall and winter months when buyer activity typically slows.

For buyers, this can mean:

• Better pricing

• Seller concessions

• Opportunities to negotiate terms that weren’t possible just a couple of years ago

This is where having a local expert matters. Every neighborhood, even within Silicon Valley, is behaving differently.

So… Is Now a Good Time to Buy?

National economists agree on this point: If you can afford it and plan to stay put, buying now can make sense.

Buying a home allows you to:

• Start building equity immediately

• Lock in your housing costs

• Avoid future rent increases

• Position yourself for long-term financial stability

That said, buying isn’t right for everyone, and it shouldn’t be rushed. The key is understanding your options, your timeline, and what’s realistic in today’s market.

Looking Ahead to 2026

As we head into the new year, forecasts are calling for a meaningful increase in real estate activity. Many buyers who paused over the last few years are expected to re-enter the market as affordability improves and confidence returns.

If buying or selling is on your radar for 2026, now is a great time to start the conversation.

I’m always here to help you understand what’s happening, what it means for your situation, and how to move forward with clarity and confidence.

Because in any market, especially one like Silicon Valley, who you hire truly matters.