Expand chart
Data: Unison Home Price Volatility Index; Chart: Andrew Witherspoon/Axios

You wouldn't make a 5x leveraged bet on the S&P 500 — not unless you were an extremely sophisticated financial arbitrageur, or a reckless gambler.

Even then you wouldn't put substantially all of your net worth into such a bet. Stocks are just too volatile. But millions of Americans make 5x leveraged bets on their homes — that's what it means to borrow 80% of the value of the house and put just 20% down.

By the numbers: Unison, a housing-finance startup, has crunched U.S. house-price data in a paper to be released tomorrow. Over the long run, any given home is likely to experience price volatility of about 15% per year; during the height of the crisis, that number spiked to more than 35%. That's broadly in line with the kind of volatility you see in the stock market.

  • Unison's results are in line with public data from the Federal Housing Finance Agency, which show annualized house-price volatility, over the past 10 years, ranging from 12% in Alaska to 17% in Hawaii, New York, and the District of Columbia.

Be smart: Annualized house price volatility is much greater than the amount you can expect a home to rise in value over the long term. That number is closer to about 4%. While homes are much less volatile than individual stocks, they're just as volatile as the kind of diversified stock indices most people invest in.

The bottom line: Any given home has roughly a 30% chance of ending up being worth less in five years' time than it is today. If you can't afford that to happen, you probably shouldn't buy.

Go deeper

Updated 19 mins ago - Politics & Policy

Supreme Court denies Pennsylvania GOP request to limit mail-in voting

Protesters outside Supreme Court. Photo: Daniel Slim/AFP via Getty Images

The Supreme Court on Monday denied a request from Pennsylvania's Republican Party to shorten the deadlines for mail-in ballots in the state. Thanks to the court's 4-4 deadlock, ballots can be counted for several days after Election Day.

Why it matters: It's a major win for Democrats that could decide the fate of thousands of ballots in a crucial swing state that President Trump won in 2016. The court's decision may signal how it would deal with similar election-related litigation in other states.

Microphones will be muted during parts of Thursday's presidential debate

Photos: Jim Watson and Saul Loeb/AFP via Getty Images

The Commission on Presidential Debates adopted new rules on Monday to mute microphones to allow President Trump and Joe Biden two minutes of uninterrupted time per segment during Thursday night's debate, AP reports.

Why it matters: In the September debate, Trump interrupted Biden 71 times, compared with Biden's 22 interruptions of Trump.

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Politics: Trump says if Biden's elected, "he'll listen to the scientists"Trump calls Fauci a "disaster" on campaign call.
  2. Health: Coronavirus hospitalizations are on the rise — 8 states set single-day coronavirus case records last week.
  3. States: Wisconsin judge reimposes capacity limit on indoor venues.
  4. Media: Trump attacks CNN as "dumb b*stards" for continuing to cover pandemic.
  5. Business: Consumer confidence surveys show Americans are getting nervousHow China's economy bounced back from coronavirus.
  6. Sports: We've entered the era of limited fan attendance.
  7. Education: Why education technology can’t save remote learning.