03/18/2010 05:12 am ET Updated May 25, 2011

Buying A Home Is A Lousy Investment: Fed Economist Karen Pence

Before the housing bust, Americans tended to think their homes were their best and most important investments - a view promoted by Washington policy makers who made home ownership a top priority. Karen Pence, who runs the Federal Reserve's household and real estate finance research group, argues at the American Economic Association's meetings this week that homes are actually a terrible investment.

Putting aside the fact that home prices have fallen dramatically, she says several factors make homes a lousy investments:

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