By Timothy Ulbrich, PharmD
For generations, the advice to young professionals was nearly automatic: As soon as you can, buy a home. After all, renting was “throwing money away,” while buying allowed you to build equity and put down roots.
But the past few years have added new wrinkles to the rent versus buy equation, especially for pharmacists early in their careers. High interest rates, steep home prices, rising property taxes, and an ongoing housing shortage make the decision more nuanced than ever. Add in student loans, career transitions, and personal goals, and the answer to whether buying “still makes sense” is often: It depends.
The case for renting, at least for now
One of the most underrated benefits of renting is flexibility. Buying a home can tie you down in ways you might not anticipate. If you’re finishing residency, starting your first postgraduate position, or still exploring career opportunities, renting allows you to change locations quickly without the hassle or cost of selling a home, which can be significant. Realtor commission costs alone average 6% of a home’s sale price. If you buy and then need to move within a couple of years, you could easily spend more in transaction costs than you’d gain in appreciation.
Renting can also protect your budget in markets where monthly ownership costs far exceed rental costs. In some cities, the difference between renting and owning a comparable property can be $500 to $1,000 or more each month (money you could redirect toward paying down student loans, investing, or saving for a larger down payment later).
And let’s not forget the additional savings: When you rent, someone else fixes the leaky faucet and replaces the broken water heater.
The case for buying when you’re ready
While renting offers flexibility, owning a home still comes with long-term financial advantages if you’re in a position to buy smart. The most obvious is building equity, the difference between your home’s value and what you owe on your mortgage. Over time, paying down your loan and seeing your property appreciate can significantly boost your net worth.
Homeownership can also provide stability, especially with a fixed-rate mortgage. Your principal and interest payments won’t change from year to year, even if rents in your area increase. That stability can be especially valuable in markets where rental prices are climbing rapidly.
Plus, owning a home gives you more control over your living space. There’s something to be said for painting the walls, renovating the kitchen, and getting the dog you want without needing someone else's approval.
How long should you plan to stay?
One of the most important questions to ask when deciding whether to rent or buy is: “How long do I expect to stay in this home?” If you’ll be there for less than 3 years, renting often makes more sense once you account for transaction costs. Between 3 and 5 years, it depends on your market and the specifics of the home. If you’ll be there 5 years or more, buying tends to have the edge, assuming you purchase a home you can comfortably afford.
What about my student loans?
For many pharmacists, student loans are a significant factor. Lenders look at your debt-to-income ratio (DTI), which includes your student loan payment.
If your loans are in an income-driven repayment plan, your lower monthly payment may improve your DTI, even if you choose to pay extra each month. But if your loans are in deferment or forbearance, lenders may use a percentage of your total balance to estimate a payment, sometimes as high as 1%, which can reduce how much you can borrow.
Understanding how your loans will be factored into a mortgage application is essential before you start house hunting.
Factor in all the costs
When comparing renting and buying, it’s easy to focus just on monthly payments by comparing rent to the monthly mortgage payment (which typically includes PITI: principal, interest, taxes, and insurance). But ownership comes with other costs:
- Property taxes—These tend to increase over time and vary by location.
- Homeowners insurance—Premiums have been rising in many areas.
- Maintenance and repairs—I recommend budgeting 1–2% of your home’s value annually.
- Utilities—Larger spaces or older homes may cost more to heat, cool, and maintain.
Being “house poor,” spending so much on housing that you can’t fund other priorities, is a real risk, especially early in your career. That’s why buying should be part of your overall financial plan, not a standalone decision.
5 signs you’re ready to buy
- You’ll be in the same area for at least 5 years. Time helps offset transaction costs and market swings.
- Your budget can handle all the costs. Mortgage, taxes, insurance, maintenance, and utilities.
- You have a healthy emergency fund. At least 3 to 6 months of essential expenses.
- Your debt is under control. Manageable student loans and a strong credit score.
- Buying fits your bigger financial plan. It complements, not competes with, goals like retirement savings or loan repayment.
5 signs you should keep renting
- You’re unsure about your location. Career moves or life changes could have you relocating soon.
- Your budget would be tight after buying. If housing crowds out other priorities, it’s not time yet.
- Your emergency fund is thin. Without reserves, an unexpected repair could be trouble.
- Your DTI ratio is high. Large student loan payments or other debts could limit borrowing power.
- You’re still building other priorities. Renting may free up cash for paying off loans, investing, or saving for a bigger down payment.
The bottom line
Buying a home still makes sense for many first-time buyers, but not for all, and not always right away. For recent pharmacy graduates, the best choice depends on your career plans, financial readiness, and local market conditions.
Renting can offer valuable flexibility and financial breathing room, especially if you’re early in your career, managing student loans, or unsure about your long-term location. Buying can offer stability, equity growth, and pride of ownership if you’re ready to commit for the long term and can afford the costs without straining your budget.
Either way, make your decision intentionally, with a clear understanding of the trade-offs, and without letting outdated “rules of thumb” pressure you into a move that’s not right for you.
Timothy Ulbrich, PharmD, is cofounder and CEO of YFP Wealth (formerly Your Financial Pharmacist), a fee-only, fiduciary financial planning firm providing comprehensive virtual financial planning for pharmacy professionals.
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