Every time I receive a rent bill that seems to rise slightly each year, I start to wonder if I should buy a house. Similar inquiries are increasing in Memphis as well. However, before reaching a conclusion, it's important to first check the numbers.

The average home value in Memphis is $146,746. Over the past year, it has decreased by 3.0 percent (Zillow, as of June 2026). The average rent for apartments has slightly increased by 0.15 percent to $1,146 (RentCafe, as of August 2026). Recent market trends show that home prices are declining while rent remains relatively stable. Compared to other major cities in the U.S., both figures are on the lower side.

Let's check what these numbers mean using the price-to-rent ratio. This is calculated by dividing the home price by the annual rent. In Memphis, dividing the home value of $146,746 by the annual rent of $13,752 gives a ratio of about 10.7. Generally, a ratio below 15 indicates that buying is relatively more favorable, so 10.7 is significantly below that threshold.

When converted to a mortgage, this difference becomes clearer. Applying a 20 percent down payment and a 30-year fixed rate of 6.65 percent (Freddie Mac, as of August 20, 2026), the principal and interest would amount to about $754 per month. This is actually lower than the current rent of $1,146. Even when adding property taxes and insurance, it often remains lower than rent.

If the down payment is less than 20 percent, the higher loan-to-value ratio will incur PMI insurance, increasing the monthly burden. Nevertheless, in areas like Memphis where home prices are low, the principal amount of the loan also decreases, making the initial entry barrier lower compared to other major cities. However, it's important to note that low home prices come with their own reasons. The recent decline in home prices has varied significantly by region, so it's crucial to check recent sales in neighborhoods of interest individually.

Consider whether you can manage a 20 percent down payment and how long you plan to stay in the area. If approaching this as an investment, it's also worth calculating the rental yield. Dividing the annual rent of $13,752 by the home price results in a total yield exceeding 9 percent, but after accounting for property taxes, management fees, and vacancy periods, the actual net yield will be lower.

In Memphis, there is a steady inquiry from families looking for schools in Collierville or Germantown. While school ratings can be checked on GreatSchools or Niche, school district boundaries change frequently, so it's advisable to verify the assigned school based on the property address. Tennessee has no state income tax, but the sales tax is relatively high, so families moving from other states should compare the overall cost of living structure.

However, it's important to be cautious about simply comparing low home prices and low rents on the same scale. Recent market trends indicate that Memphis has significant variations by region. Some neighborhoods have seen price increases in recent years, while others continue to experience adjustments. It's safer to check the price trends of the last three years in the areas of interest before making a final decision.

If you have sufficient down payment capacity and plan to stay for more than five years, the current figures clearly indicate that buying is less burdensome. Conversely, if funds are still lacking or your living plans are flexible, taking time to rent and observe the market isn't a bad option. The low rent makes it a favorable environment to save money in the meantime. The fact that it's a market where there's no rush could be the biggest advantage of Memphis.

On the surface, the area leans towards buying. However, when approaching it as an investment, it's also essential to consider rental demand and vacancy risks. This article does not constitute investment or legal advice, and it's advisable to consult with professionals before making any agreements.