According to a housing survey by the Federal Reserve Bank of New York, the prospect of renters transitioning to homeownership is fading away. Respondents believe they’ll never become homeowners.
Results reveal that nearly 75% of renters find obtaining a mortgage “somewhat or very difficult,” marking an almost 8.5% increase from 2023, which the New York Fed classified as a series low. Only 13.4% of renters envision owning a home in the future.
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The survey indicates that attitudes towards real estate as an investment remain “strongly positive.” Just over 67% of respondents considered buying property in their zip code as a “very good” or “somewhat good” investment — a slight decrease from pre-pandemic levels.
Housing affordability has somewhat improved since summer 2023. The median price for an existing family home stands at $388,700, down from June 2023’s higher median price of $415,700, according to the National Association of Realtors’ Housing Affordability Index. The average monthly housing payment reported was $2,040.
The Fed survey — conducted in February — found that respondents anticipate housing prices to increase by over 5% and rental costs to surge by nearly 10% over the next year.
Despite expectations of the Fed cutting interest rates by year-end, survey respondents believe mortgage rates will continue to climb, reaching 8.7% in a year and 9.7% in three years.
Homeowners are inclined to stay put, particularly if they’ve secured a low mortgage rate. The New York Fed notes that few U.S. homeowners plan to move in the next three years. Currently moving rates are low nationwide. Rates were below 10% in 2019, whereas they averaged around 20% in the 1980s.
[LAUREN TAYLOR]
THE MAJORITY OF RENTERS SEE THE POSSIBILITY OF BECOMING HOMEOWNERS DISAPPEARING ACCORDING TO A FEDERAL RESERVE BANK OF NEW YORK HOUSING SURVEY. THEY’LL NEVER BECOME HOMEOWNERS.
THE RESULTS SHOW – JUST SHY OF 75% OF RENTERS VIEW OBTAINING A MORTGAGE AS “SOMEWHAT OR VERY DIFFICULT” – NEARLY 8 AND A HALF PERCENT INCREASE FROM LAST YEAR – WHICH THE NEW YORK FED CLASSIFIED AS A SERIES LOW.
ONLY 13-PERCENT OF RENTERS BELIEVE THEY’LL OWN A HOME ONE DAY.
THE SURVEY ALSO SHOWS – ATTITUDES REMAIN “STRONGLY POSITIVE” WHEN VIEWING REAL ESTATE AS AN INVESTMENT – AS JUST OVER 67-PERCENT OF RESPONDENTS SAID BUYING PROPERTY IN THEIR ZIP CODE WAS A “VERY GOOD” OR “SOMEWHAT GOOD” INVESTMENT A SLIGHT DECLINE FROM PRE-PANDEMIC LEVELS.
HOUSING AFFORDABILITY HAS SOMEWHAT IMPROVED SINCE LAST SUMMER.
THE MEDIAN PRICE FOR AN EXISTING FAMILY HOME IS JUST OVER $388-THOUSAND DOLLARS ($388,700) – DOWN FROM JUNE 2023’S HIGHER MEDIAN PRICE OF $415-THOUSAND DOLLARS, ACCORDING TO THE NATIONAL ASSOCIATION OF REALTORS’ HOUSING AFFORDABILITY INDEX. THE AVERAGE MONTHLY HOUSING PAYMENT WAS $2,040 THAT REPORT SHOWED.
THE FED SURVEY, WHICH WAS CONDUCTED IN FEBRUARY FOUND – RESPONDENTS EXPECT HOUSING PRICES TO INCREASE BY MORE THAN 5 PERCENT AND RENTAL COSTS TO INCREASE BY NEARLY 10 PERCENT OVER THE NEXT YEAR.
EVEN THOUGH THE FED IS EXPECTED TO CUT INTEREST RATES BY THE END OF THIS YEAR – SURVEY RESPONDENTS BELIEVE MORTGAGE RATES WILL CONTINUE TO RISE TO 8.7-PERCENT A YEAR FROM NOW AND 9.7-PERCENT IN THREE YEARS.
HOMEOWNERS ARE LOOKING TO STAY PUT IF THEY’VE LOCKED IN A LOW MORTGAGE RATE. THE NEW YORK FED SAYS FEW U-S HOMEOWNERS ARE PLANNING TO MOVE IN THE NEXT THREE YEARS AND MOVING RATES ARE CURRENTLY LOW THROUGHOUT THE COUNTRY. RATES WERE ALREADY BELOW 10-PERCENT IN 2019 – WHEREAS THEY HOVERED AROUND 20-PERCENT, ON AVERAGE, IN THE 1980S.
FOR STRAIGHT ARROW NEW, I’M LAUREN TAYLOR.
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