Both homebuyers and renters are brꦬacing for more inflation in the real estate market this year, reversing some of their optimism that housing prices could slow.

In its 2024 housing survey, the New York Federal Reserve found consumers expect home prices to grow by 5.1% in the year ahead, the second-highest reading in the annual report which was first released in 2014. Renters expect even more of a hike, with survey respondents pointing to a 9.7% annual rise in rent pr♛ices, coming after last year’s survey showed both renters and homeowners🧸 expected prices to cool. 

Mortgage Rates Moving Higher, In🧔vestment Potential Lower

The survey showed that fewer people a💞re seeing housing as an investment. The 67.1% of respondents that said it was a good investment to buy property in their zip code was the lowest in three years, though the sentiment is still above pre-pandemic levels. Peo🐟ple viewing housing as a bad investment also increased. 

Renters are also losing faith that they will ever be able to buy a home. Renters said the chance they will ever own a home was 40.1%, the lowest in the history of the survey and down from 44.4% a year ago🌳.

People could be losing interest in homebuying as it becomes unaffordable for many. Potential homebuyers have been contending with high home prices and surging mortgage rates for the past few years, 澳洲幸运5官方开奖结果体彩网:resultinไg in unaffordable housing 🍌costs.

Consumers don't expect that to change any time soon. They expect mortgage rates will be 8.7% in the next year and rise to 9.7% in three years. The survey results come as 📖澳洲幸运5官方开奖结果体彩网:borrowing costs a✅re moving higher this year, reversing the declines seen last fall to move back over the 澳洲幸运5官方开奖结果体彩网:7% threshold. 

Fewer Moving as Lock-In Effect Imp꧅acts Housing🌜 Market

The New York Fed also put out a study on the 澳洲幸运5官方开奖结果体彩网:“lock-in” effect, in which homeowners with low mortgage rates are hesitant to sell their properties in a high interest rate environment. The study sought to find out if sellers would be more likely to move if they were able to keep their current mortgage rate.

Overall, 7.4% more respondents said they would move if they could keep their current rates. However, those with mortgage r📖ates less than 3% were far more likely to say they would move if they could keep their current rate. However, the study’s authors said about half of respondents didn’t change their opinions on moving due to mortgage 🦩rates.

“We interpret this to mean that mortgage rates are not a primary factor in most respondents’ relocation plans for the next three years but are a large constraint for a relatively small but significant share of homeowners,” the study said.