NEW YORK (Reuters) – In the wake of the just-announced landmark $25 billion settlement over dodgy mortgage practices, is it time to buy a home?
While it’s laudable that those facing foreclosure may gain the ability to refinance or write down principal, there are still a host of unanswered questions about the U.S. housing market — which may not improve much at all in the short term.
Home buyers want security — the reassurance that their real estate investment will at least act like inflation-adjusted bonds and track the increase in the cost of living. During the bubble years, though, many mistakenly believed they were buying into the equivalent of bullet-proof stocks, paying both dividends and capital appreciation. Housing is neither.
A home is more like a derivative — that is, a vehicle based on a host of complex variables. Notice I didn’t call it a sure-fire investment.
It’s volatile commodity, but there’s a way to predict how it might perform — if you’re willing to be diligent.