Consumers expect rent and home prices to jump this year and renters’ optimism of ever owning a home fell below 50% for the first time, according to the New York Fed’s SCE Housing Survey…(NYFED)
- Households expect strong home price growth of 7.0% over the next twelve months, a sharp increase from 5.7% growth a predicted year ago. Expectations, however, over the next five years expectations were unchanged at 2.2%.
When it comes to renting the future was, unfortunately, quite dire…
- Households expect rent to rise 11.5% over the next twelve months which is almost double the 6.6% expected last year. In even worse news, 43.3% of renters believe they will ever own a home which is not only down from the 51.6% in 2021 but is also the first sub-50% reading in series history.
When it comes to housing as an investment sentiment actually fell along with the probability of buying…
- 70.2% of consumers believe housing is a good investment which is down from last year’s high of 73.5% but still above the sub 70% pre-pandemic. Consumers who saw housing as a very good investment fell almost three full percentage points while those who view housing as a somewhat good investment increased to 43.3%.
- The probability of buying in the next three years saw a pronounced decline of almost 8 percentage points to 60.7%, the lowest level since 2015.
On mortgage rates, households expect rates to rise sharply in the future to 6.7% on average a year from now on a 30-yr fixed and 8.2% in three years’ time.
- NOTE: This is only slightly above where consumers were in 2019 when expectations were for 6.6% and 7.7%, respectively.
This survey was conducted in February which feels like a different decade with regards to mortgage rates. Wonder how different it would be if conducted today?