Homeowners may need to look elsewhere for long-term investment returns as housing prices in some areas may not rebound long-term, Bank of America Corp Chief Executive Officer Brian Moynihan said on Tuesday.
Moynihan, CEO of the largest U.S. bank, said at a state attorneys general summit that low population growth in some regions of the country indicated that prices might not rise in the wake of the worst financial crisis since the Great Depression.
“It’s sobering to think, but some people shouldn’t be thinking of (their home) as an asset,” Moynihan said at the 2011 National Association of Attorneys General conference. “They should be thinking of it as a great place to live.”
Moynihan said the long-term average annual rise in post-war U.S. home prices of 4 percent owed much to the explosion in domestic population and, in more recent times, the relaxation of credit standards across the mortgage industry.
“The reality is that the population is not expected to grow the way it did post World War I and World War II,” he said.