Given these prospects, it's not surprising that young people aren't eager to buy a home. Between 2005 and 2010, 1.6 million young adults moved in with their parents, according to Harvard University's Joint Center for Housing Studies. Those who do rent have been slow to buy. Fannie Mae's National Housing Survey shows that fear of a lack of job security is a key factor blocking buying. While homeownership is now cheaper – Joint Center data indicates the average monthly payment on a median-priced home dropped from $1,362 in 2007 to $900 last year – the notion of the home as a great investment has lost some luster.
"I do not subscribe to the idea that you need to buy a house to be rich," says Stuart Ritter, a vice president of T. Rowe Price Investment Services Inc., in Baltimore. "A house is not an investment. A house is a lifestyle decision." If you do buy a house, Mr. Ritter advises that you stay in it for at least seven years to recoup transaction costs.
