It arrives the same way every year. Slipped under your door, dropped in your inbox, or handed to you with a smile that doesn’t quite reach the eyes. The annual lease renewal letter.
You already know what it says before you open it. There’s a polite paragraph about what a wonderful tenant you’ve been — reliable, respectful, never once complained about the hallway light that’s been flickering since 2023. And then, buried somewhere between the pleasantries and the signature line, is the number. Your new rent. Higher than last year. Again.
No explanation. No apology. Just the number — and a deadline to sign.
Here’s some context they don’t include: that increase isn’t random. In Sioux Falls, average rents have increased nearly 2% over the past year — which doesn’t sound dramatic until you do the actual math. On a $1,200 apartment, that’s roughly $24 more a month, $288 a year, quietly added to your bill. It’s worth understanding why: landlords are managing their own rising costs — property taxes, insurance, maintenance — and in a growing market like Sioux Falls, increased demand gives them the room to adjust pricing accordingly. Think of it this way: your landlord may well have a summer home they’ve got their eye on. And as a result, they need to raise your rent. So in a roundabout way, you’re helping them get there.
What the Letter Doesn’t Say
Here’s the information your lease renewal letter will never volunteer: a portion of every rent payment goes toward covering your landlord’s mortgage.
Every rent payment helps cover their property taxes, insurance, maintenance, and their loan. While you’ve been writing that check faithfully every month, they’ve been building equity — equity that compounds, equity that becomes options: a second property, a renovation, a retirement cushion. It’s not a criticism of renting — it’s simply how the math works, and it’s worth knowing.
Now, to be fair — and this is the part most real estate content glosses over because it’s inconvenient — renting can genuinely cost less per month than owning right now in Sioux Falls. That’s true. Anyone who tells you otherwise isn’t being straight with you. The median rent in Sioux Falls as of early 2026 sits around $1,093 per month — and for many buyers, a mortgage payment on a new construction home from Empire Homes will run higher than that today.
So why would anyone buy right now?
Because cheaper per month and smarter long-term are two very different things.
The Number That Changes Everything
Here’s what most renters don’t know, and what no lease renewal letter will ever tell you: mortgage rates just hit their lowest point in years.
The 30-year fixed-rate mortgage is currently averaging around 6.11% — down from 6.65% this time last year, according to Freddie Mac. That gap matters more than it sounds. On a $300,000 new home, that rate difference translates to roughly $120 less per month than buyers were paying just twelve months ago. The window between renting and owning just got meaningfully smaller. And it’s still moving in the right direction.
There’s something else worth understanding about how mortgages work that most people never fully grasp: your payment never goes up. Your landlord’s letter arrives every year. Your mortgage statement doesn’t change. The same payment that feels slightly higher than rent today will feel like a bargain in five years when your former neighbors are renewing their leases at $1,400 a month.
The Equity You’re Not Building
Sioux Falls home prices are up significantly compared to last year. That means a homeowner who purchased a new construction home in Sioux Falls last year has already gained meaningful equity — not from flipping, not from renovating, but simply from owning. The home went up in value while they lived their life in it.
A renter who paid $1,100 a month over that same year spent over $13,000 and owns the same amount of real estate they started with. That’s not a judgment. That’s just math.
So What Does the Letter Really Cost You?
When you sign that lease renewal, you’re not just agreeing to another year of payments. You’re agreeing to another year of building someone else’s future while yours waits. Another year of rent that will almost certainly be higher again next spring. Another year of watching Sioux Falls grow — new neighborhoods taking shape, new homes going up, home values climbing steadily — from the outside.
Empire Homes currently offers a 3% homebuyer credit on every new home — which can go directly toward closing costs or buying your rate down, reducing that monthly payment gap even further. For a lot of buyers, that credit is the bridge between “almost” and “let’s do this.”
The lease renewal letter will keep coming. Every year, a little higher. Every year, a little more of your money going somewhere other than your future.
Or you can write a different letter entirely — to yourself. The one that says: this is the year I stop renting someone else’s dream and start building my own.