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Renting vs. Owning in 2026: What California Families Need to Know About Housing Costs and Estate Planning

Renting vs. Owning in 2026: What California Families Need to Know About Housing Costs and Estate Pla

If you’re a California resident weighing the financial burden of homeownership against renting—or planning your estate around real property—this analysis will help you make informed decisions that protect your family’s financial future.

Why Renting Costs Less Than Owning in Every Major U.S. Metro

According to a recent study published by Axios, renting is now more affordable than owning a home in every major U.S. metropolitan area—including expensive California markets like Los Angeles, San Francisco, Sacramento, and San Diego.

The analysis reveals that rising mortgage rates, soaring home prices, and increasing property taxes have made homeownership financially prohibitive for many California families. Meanwhile, renters benefit from flexibility, lower upfront costs, and freedom from maintenance expenses.

Key Findings from the Study

  • Monthly cost savings: Renters save an average of $800–$1,500 per month compared to homeowners in major metros
  • Mortgage rate impact: With rates hovering above 6%, the cost of borrowing has increased dramatically
  • Property tax burden: California homeowners face significant annual property tax bills, especially in high-value markets
  • Maintenance and repairs: Homeowners pay an estimated 1–2% of their home’s value annually on upkeep
  • Opportunity cost: Funds tied up in a down payment could be invested elsewhere for potentially higher returns

    • What Does This Mean for California Families Planning Their Estates?

    If you’re a California resident managing assets or planning your estate, understanding the rent-vs.-own question isn’t just about monthly budgets—it’s about long-term wealth transfer, probate exposure, and protecting your family’s financial legacy.

    How Homeownership Affects Your Estate Plan

    Real property is one of the most common assets that California families need to address in estate planning. Here’s what you need to know:

  • Probate exposure: If you own a home valued over $184,500 (California’s probate threshold as of 2026), your estate will likely go through probate unless you’ve transferred the property into a revocable living trust
  • Tax implications: California has no state estate tax, but federal estate tax applies to estates exceeding $13.99 million (2026 threshold). Real estate appreciation can push estates closer to this limit
  • Title and transfer issues: Improperly titled property can create family disputes, delays, and unnecessary legal costs during probate
  • Property tax reassessment: Under Proposition 19 (effective 2021), transferring property to heirs can trigger reassessment unless specific exemptions apply

    • How Renting Simplifies Estate Planning

    For renters, estate planning tends to be more straightforward:

  • Lower probate risk: Without real property, your estate may avoid formal probate entirely if your total assets are below the threshold
  • More liquid assets: Cash, retirement accounts, and investments are easier to divide among heirs and can often transfer outside of probate using beneficiary designations
  • Flexibility: Renters can relocate for better opportunities, lower living costs, or to be closer to family without the burden of selling a home

    • Real-World Questions California Families Are Asking

    Should I buy a home if I’m planning my estate?

    It depends on your financial situation, family goals, and risk tolerance. If you value stability and long-term appreciation, homeownership may still make sense—but you’ll need a revocable living trust to avoid probate and protect your heirs from unnecessary legal costs.

    What happens to my house when I die if I don’t have a trust?

    If you own a home in California and die without a trust, your property will likely go through probate—a court-supervised process that can take 12–18 months and cost 4–6% of your estate’s value in legal and court fees. Your family will need to hire a probate attorney, and the process is public record.

    Can I protect my rental deposits and lease agreements in my estate plan?

    Yes. While rental agreements typically terminate upon death, you can designate a financial power of attorney to handle lease obligations and ensure your personal belongings are protected during the transition.

    How can I pass wealth to my children if I’m renting instead of owning?

    Many California renters build wealth through retirement accounts, life insurance, and investment portfolios. These assets can be transferred efficiently using beneficiary designations, avoiding probate entirely. A comprehensive estate plan ensures your heirs receive these assets with minimal delay and maximum tax efficiency.

    How California Probate and Trust, PC Helps Families Navigate Housing and Estate Decisions

    At California Probate and Trust, PC, we understand that California residents face unique challenges when it comes to housing costs, estate planning, and protecting their families. Whether you’re a homeowner concerned about probate exposure or a renter looking to maximize wealth transfer, our experienced attorneys provide transparent, compassionate guidance tailored to your situation.

    Our Services Include:

  • Revocable Living Trusts: Avoid probate, protect real property, and ensure seamless transfer to your heirs
  • Last Will and Testament: Designate guardians for minor children and distribute personal assets
  • Power of Attorney Packages: Appoint trusted agents to manage financial and healthcare decisions
  • Advance Healthcare Directives: Ensure your medical wishes are honored
  • Probate Administration: Navigate California probate efficiently if a loved one passes without a trust
  • Trust Administration: Manage and distribute trust assets according to your loved one’s wishes

    • We’ve helped thousands of California families protect what matters most. Our Sacramento-based team offers free, no-obligation consultations to walk you through your options, assess your needs, and create a plan that fits your budget and goals.

    Take Control of Your Family’s Financial Future

    Whether you’re renting or owning, the decisions you make today will impact your family for generations. Don’t leave your loved ones to navigate complex probate proceedings, property disputes, or tax burdens without a clear plan.

    Schedule Your Free Estate Planning Consultation Today

    Contact California Probate and Trust, PC to speak with a certified estate planning specialist. We’ll review your family dynamics, assess your assets, and help you build a personalized plan that protects your legacy.

    Call us at (866) 674-1130 or visit cpt.law to get started.

    Legal Disclaimer

    This article is provided for informational purposes only and does not constitute legal advice. Estate planning and probate laws are complex and vary based on individual circumstances. The information contained herein is not intended to create an attorney-client relationship. For personalized legal guidance tailored to your specific situation, please consult with a qualified California estate planning attorney. California Probate and Trust, PC is available to provide professional legal services to California residents and those managing California-based assets.

    Sources:

    Data and analysis referenced from Axios: “Renting costs less than owning in every major U.S. metro”