America’s mortgage finance market is still recovering from its housing crisis hangover.
In normal times, homeownership is not a financial home run.
Home values over the long run tend to rise just slightly faster than inflation, making it a worse investment than, say, investing in the stock market.
But these are not normal times. Though the economic recovery is six years in the making and home prices have recovered to their pre-bubble norms, the real estate market has changed radically—mostly for the worse.
Even creditworthy borrowers are having difficulty securing a mortgage to buy a home. Real estate data firm Zillow released a report this week showing that buying a home makes financial sense, on average, after living in the same home for just two years. This varies depending on location. For instance, in expensive areas like Washington, D.C. and Los Angeles, buying a home starts to make sense after you’ve lived there for 4.2 and 5 years, respectively.
via Real estate may be cheap, but mortgages are very hard to come by – Fortune.
