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New York Fed: Fewer Renters Expect to Ever Buy Home

Renters are less confident that they will ever own a home than they have been since the Federal Reserve Bank of New York began asking them about this prospect.

The share of renters who expect to own a home dropped to 40.1% in the New York Fed’s 2024 SCE Housing Survey, which is 4.3 percentage points lower than the previous year and the lowest since the annual survey was launched in 2014, the New York Fed said in a Monday (May 6) press release.

This survey, which is part of the broader Survey of Consumer Expectations (SCE), was fielded in February, according to the release.

Households’ home price growth expectations for one year ahead reached 5.1% — which was up from 2.6% a year earlier and the second highest reading in the survey’s history — while expectations for five years ahead declined by 0.1 percentage point to 2.7%, per the release.

“Expectations about the change in the cost of rent were considerably higher than home price expectations but followed a similar pattern, as rental price growth expectations increased for one-year-ahead and were essentially flat for five-years ahead,” the release said.

Specifically, rent price expectations for the next year rose 1.5 percentage points to 9.7%, while those for the next five years inched up 0.1 percentage point to 5.1%, per the release.

The survey also found that homeowners’ expectations about the likelihood of refinancing their mortgages over the next 12 months rebounded slightly after falling last year, but remain “well below” pre-pandemic levels, according to the release.

In a finding that continued a trend seen since 2014, the survey found that consumers are less likely to say that they expect to move to a different primary residence, the release said. The expectations of residential mobility for both the one-year horizon and the three-year horizon fell to new series lows at 13.4% and 24.5%, respectively, per the release.

PYMNTS Intelligence found in March 2023 that while consumers’ belief that buying a home is possible has decreased across age groups, Generation Z is especially likely to believe that the goal is out of reach.

Overall, the share of consumers who believed home ownership was within reach stood at 29% in January 2023, according to “Consumer Inflation Sentiment: Rising Housing Costs Deflect Economic Optimism.”