U.S. home prices dropped by a third from the start of 2007 to the start of 2012, according to Fiserv, an analytics firm.
Fiserv forecasts prices will bounce back an average of 3.7 percent a year for the next five years -- a rate that would still leave prices 20 percent below the peak. At that forecasted growth rate, the national average high of $238,000 would not be hit again until 2023.
It could take even longer in some areas. "In some hard-hit markets, prices could take decades to recover," said Fiserv economist David Stiff.
Among those facing a long haul: Arizona, California, Florida and Nevada, the states most caught up in the speculative feeding frenzy of the mid-2000s.
In California, for example, home prices should grow a little faster than the national average. Fiserv projects 4.4 percent gains during the next five years. But the hole is also deeper, with prices having fallen nearly 46 percent from early 2007 to early 2012. Break even won't come until after 2026.
Homeowners in Nevada may have to wait the longest to make up lost ground. Home prices in the state plunged nearly 60 percent, and Fiserv projects annual gains of just 2.3 percent. It would take some 40 years at that pace to get back to 2007 levels.
Real estate, of course, is local, and there are many housing markets that never bubbled during the boom. In those places, buyers who bought in 2007 are much more likely to be in the money today. In South Dakota, Texas and West Virginia, prices already are slightly higher than they were five years ago.
In North Dakota, a housing shortage driven by the oil boom has sent prices soaring 17.7 percent over the past five years.
Home price as percentage of income: 152% Median home price: $99,000 Median family income: $65,300
Lansing is the first of five (six, if parts of the South Bend region are included) metropolitan areas located in Michigan to make this list. Home prices in the area are expected to rise by an average of 5.8 percent annually between 2012 and 2017, among the top third projected increases in the country. The median home price is just south of $99,000, or $60,000 less than the median home price in the United States.
Home price as percentage of family income: 152% Median home price: $108,000 Median family income: $70,900
The median home price in Appleton of $108,000 is higher than any metro area on this list, but it is still well below the U.S. median home price of $159,000. Home prices have consistently been cheap in the area for years. The median price between 2007 and 2012 only declined by 4.9 percent, far less than the national drop of 33.3 percent.
Home price as percentage of family income: 150% Median home price: $79,000 Median family income: $52,300
The median family income in Battle Creek of $52,300 is the 23rd lowest among all metro areas surveyed. But with home prices the third cheapest of all metro areas, buying a home is quite affordable. Home prices were relatively cheap before the economic downturn, too. Prices fell by 16.1 percent from their peak in the second quarter of 2006 to the first quarter of 2012, a far more modest decline than the nationwide home price drop of about 33 percent.
Home price as % of family income: 150% Median home price: $80,000 Median family income: $53,300
Homes in the Youngstown-Warren-Boardman area are affordable, even for those with modest incomes. While median family income in the region is $9,600 lower than the national median income, median home prices are even lower — the fifth lowest in the country.
Home price as percentage of family income: 139% Median home price: $79,000 Median family income: $56,900
Memphis is the only metropolitan area on this list not located in the Midwest. While home prices of $79,000 are the third lowest of all metropolitan areas measured, home prices are expected to rise at an annual rate of 6 percent between 2012 and 2017, more than 2 percentage points more than the national median. Home prices are expected to rise 8.6 percent next year alone, one of the biggest growth rates in the country.
Home price as percentage of family income: 133% Median home price: $95,000 Median family income: $71,600
In the Warren-Troy-Farmington Hills metro area, the combined factors of high income and low home prices can make paying for a house easy. The median family income of $71,600 is the highest on this list and nearly $20,000 higher than the nearby Detroit metro. Furthermore, the median home price of $95,000, which has fallen 40.9 percent since it reached its peak in the second quarter of 2005, means that homes have become a bargain for those who can afford to buy one in this shaky economy.
Home price as percentage of family income: 132% Median home price: $80,000 Median family income: $60,000
Median home prices in Rockford are only expected to rise by 2.4 percent in 2013, less than the 5 percent price increase expected nationally. However, between 2012 and 2017, home prices are expected to grow at an annualized rate of 4.2 percent, besting the U.S. rate of 3.9 percent.
Home price as percentage of family income: 121% Median home price: $69,000 Median family income: $57,300
The median monthly mortgage payment for a house in South Bend is only 5.52 percent of the median monthly income. This is the only metro area in the United States, besides Detroit, where mortgage payments are less than 6 percent of median income.
Home price as percentage of family income: 79% Median home price: $41,000 Median family income: $51,900
While home prices were already cheap in Detroit before the housing downturn, they became even cheaper after. Home prices between the first quarter of 2007 and the first quarter of 2012 fell a whopping 53.7 percent, or 14.3 percent annually — the 10th-largest drop of all metro areas surveyed. With a median home price that is $28,000 lower than any other metro area reviewed, a median mortgage payment is only 3.6 percent of monthly income.