In 64% of metro areas nationwide, buying a home is a better financial decision than renting for residents planning to stay in their home for at least three years, Zillow claims in a new report. ()

The study by Zillow (Z) incorporates all possible costs associated with both buying and renting. These include upfront payments, closing costs, estimated monthly rent and mortgage payments, insurance, taxes, utilities and maintenance costs. 

The study then ties in historic and anticipated home value appreciation rates, rental rates and rental appreciation rates to help determine the point at which buying becomes less expensive than renting. 

Among the 30 largest metros analyzed by Zillow in the first quarter, Miami, Detroit and Phoenix were the metros with the shortest breakeven horizon. The longest breakeven horizon in the first quarter was seen in New York, Boston and San Jose. 

“Locally high home value appreciation in many areas, combined with historically low mortgage rates and low home prices relative to recent peaks, has made buying a home a more advantageous financial decision than renting for many would-be buyers,” said Zillow Chief Economist Dr. Stan Humphries.

Humphries added, “The decision to buy or rent should always take into account a number of factors, one of which is how long a buyer or renter plans to stay in a property. Even in areas with relatively low breakeven horizons, buyers should resist the temptation to buy and sell properties based only on short-term goals. And renters in these areas should never feel compelled to stretch themselves to buy if it is currently beyond their means.” 

In areas where home values are expected to increase more quickly in coming years, the time it takes to recoup upfront costs will be lower and thus the breakeven period will be shorter.

In metros where home values are expected to rise more slowly, or even fall, the breakeven horizon will be longer, according to Zillow.