A friend I've known for a long time in Lansing recently mentioned that while home prices have shown little movement over the years, the numbers on rental contracts keep going up with each renewal. Many people are curious about why this is happening, so I will break it down step by step.

First, let's look at home prices. According to Zillow, the median home value in Lansing for 2026 is $145,586. While this is a 2.4% increase from the previous year, it is still a modest rise. Expanding to the Lansing-East Lansing metro area, the median value is $202,727, which is higher than the city itself. So, what about rents? According to RentCafe, the average rent is $1,241, which has increased by 3.29% from the previous year. This means rents are moving faster than home prices.

So how should we view these two together? The metric used here is the price-to-rent ratio. This is calculated by dividing the home price by the annual rent, and in Lansing, the home price is about 9.8 times the annual rent of $14,892. Generally, a ratio below 15 is seen as favoring home sales, so Lansing is significantly lower than that.

Let's also look at rent by room size according to Zumper. A studio costs $795, a one-bedroom is $900, a two-bedroom is $1,100, a three-bedroom is $1,429, and anything with four or more bedrooms is $2,100. As the number of rooms increases, the rental burden also grows, so for families needing multiple rooms, this gap may feel even larger.

How much is needed for a down payment? If we assume a 20% down payment, that would be about $29,100. Even with a mortgage that includes property taxes and insurance, the monthly payment can be around $1,100. This is not much different from the rent of $1,241, and in some cases, it may even be lower. Compared to other cities, the entry barrier is definitely lower here.

So why does it feel like only rents are rising? In markets with lower sales prices, the supply of new rental units does not increase quickly. However, Lansing, which is home to a state university and state government agencies, has steady rental demand. When demand is present but supply is slow, it is common for rents to respond first. From the landlord's perspective, with new construction lagging, they tend to gradually increase rents on existing units.

Lansing is the capital of Michigan and is adjacent to East Lansing, home to Michigan State University. Jobs related to state government and the university are stable, so rental demand does not fluctuate much. On the other hand, the supply of new apartments is not as active as in other major cities, leading to a gradual increase in rents within the existing inventory.

If the purpose is to live in the property, which option is better? In markets with low ratios, buying seems to be a relatively advantageous choice. However, it is important to consider that there is a significant price difference between areas with good school reputations and those without in Lansing. Areas that Korean families tend to focus on often have higher sale prices than the city average, so I recommend checking the assigned school for the address before making a purchase.

If gathering a down payment is challenging, living in a rental for a few more years to save up is also an option. However, if rents continue to rise by about 3% each year during that time, it is important to keep in mind that the speed of saving for a down payment may not keep pace with the rising rents.

If you are coming from another state, you should also consider Michigan's property tax system. The millage rate varies by county and school district, and your primary residence benefits from a Homestead Exemption, which lowers taxes. Since this system differs from the tax structure in your previous state, be sure to recalculate before closing. Rather than rushing to decide based solely on a low ratio, it is safer to check the actual condition of the property and its repair history. This is not investment or legal advice, and I recommend consulting with a professional before finalizing any contracts.