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buy_rent_signHome buyers in Boston, New York, and Washington, D.C. have to stay in a home for at least three years to break even on a home purchase, and buyers in the Bay Area would have to stay nearly that long to make buying financially advantageous, according to Zillow’s Breakeven Horizon analysis for the fourth quarter of 2015.

Those under 35 stay employed at the same place for an average of three years, so buying may not make sense for them, from a financial standpoint, even if paying a mortgage would be more affordable.

In general, Americans can break even on a home purchase in less than two years in 70 percent of U.S. metros, thanks to low interest rates, healthy home value forecasts, and the relatively fast pace of rents in recent years.

The Breakeven Horizon is featured in the paperback edition of Zillow Talk: Rewriting the Rules of Real Estate (Grand Central Publishing, Jan. 26), as one of the major data points to consider when deciding whether to rent or buy. On average in the U.S., you don’t need to plan on living in a home for even two years to make purchasing the home more financially advantageous than renting it over the same time period. Among large housing markets, the Breakeven Horizon is longest in Washington, D.C. – 4.5 years – and shortest in Dallas – 1.3 years.

Around the country over the last year, the Breakeven Horizon quickened in most of the Midwest and Southeast as well as in the Northeast corridor from New York to Boston. The Horizon stretched longer in Florida, Northern California, and in the Northeast from Virginia Beach to Philadelphia, but it remained clear that financially, it’s still a better deal to buy a home than rent it, assuming you’re planning to stay in the home for at least a couple years.

However the decision to buy may not be so simple for millennials – whose first jobs often take them to job centers with relatively high Breakeven Horizons. Boston, one of the nation’s youngest cities, has a Breakeven Horizon of just over three years. San Francisco’s Breakeven Horizon is 2.9 years, up from 2.6 years in the fourth quarter of 2014. Both markets are attracting young people following jobs, and many of those remain renters despite record-high rental costs.

“Even with record-high rents in job centers like San Jose, Boston and Washington, D.C., putting off a home purchase might be the best financial decision for a young person who has saved enough for a down payment, depending on how long they intend to stay in their jobs and homes,” says Zillow Chief Economist Svenja Gudell. “Young workers face a lot of hurdles on the way to homeownership, including saving for a down payment in the first place and deciding where and when to settle down. The latest Breakeven Horizon gives young people another data point to consider when they’re making this important financial decision.”

In general, rents are flattening across the country and expected to continue to stabilize, a factor that could lengthen the Breakeven Horizon as homes continue to appreciate. Condominiums – a common choice for young home buyers in urban neighborhoods – have a longer Breakeven Horizon because of condo association fees.

For more information, visit www.zillow.com.

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