In most cities across the United States, it is better financially to buy a house than to rent one if a buyer intends to live in the home for at least three years, a new analysis by Zillow Inc. shows.

For the analysis, Zillow evaluated the “breakeven horizon” for 224 metropolitan areas and 7,500 U.S. cities to establish how long it would take before buying a home becomes better financially than does renting the same home.

In more than three-fourths of the metropolitan areas studied, a homebuyer would break even in three years or less of owning a home.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

Overall, in 7 percent of the metropolitan areas, it takes more than five years to reach the breakeven point. Those with the longest breakeven horizons are San Jose, Calif. (8.3 years), Oak Harbor, Wash. (7.2 years), Santa Cruz, Calif. (7.1 years) and San Luis Obispo, Calif. (6.3 years).

The metropolitan areas with the shortest breakeven period (all at 1.6 years) are Memphis, Tenn., Miami-Ft. Lauderdale, Salisbury, Md., Red Bluff, Calif., Mobile, Ala. and Tampa, Fla.

“Across most of the country, historic levels of affordability make buying a home a better decision than ever, especially considering rents have risen more than 5 percent over the past year,” says Stan Humphries, Zillow’s chief economist. "This is the first analysis of metros and cities that presents the buy versus rent decision in an intuitive way, by telling consumers how long they must live in the home before buying breaks even with renting financially.”

Humphries tells Yahoo his firm’s analysis is different than the price-to-rent ratio that is typically used to compare buying with renting because the Zillow estimate includes the all-in cost of owning a house and because the price-to-rent ratio compares homes available for rent with those that are for sale.

“And those actually turn out to be quite different stocks of inventory,” he says.

“Nationally home prices are back to early 2004 levels,” he tells Yahoo, noting that they have bottomed. And when these low prices are paired with the low “mortgage rates, which are better than they have been in the past 40 years, affordability is through the roof.”

Humphries expects home values to grow 1 percent during the next year.

While home prices might have bottomed, not everyone will be able to get financing.

“Financing is readily available for people that are rich, for people that don’t need it,” real estate mogul Donald Trump stated. “If you need it, you cannot get financing.

“If you don’t need it, you’ll get it for very little money,” he noted.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.