Home prices rise, renters see buying prospects dim: New York Fed survey

Newly built single-family homes go up for sale in Encinitas, California, U.S., July 31, 2019. REUTERS/Mike Blake/File Photo

Join now for FREE unlimited access to Reuters.com

April 18 (Reuters) – U.S. households are expecting house prices and rents to rise sharply this year, and as growth in both slows, renters are seeing their chances of ever owning rapidly fade, according to a new Federal Reserve survey. Bank of New York.

Home prices are expected to rise 7% next year, but average 2.2% a year over the next five years as mortgage rates are expected to accelerate, according to the survey released on Monday.

Meanwhile, rents are expected to rise even faster, jumping 11.5% over the next 12 months and rising 5.2% on average each year for the next five months.

Join now for FREE unlimited access to Reuters.com

Last year, respondents to the same survey expected house prices to rise 5.7% and rents to rise 6.6% in the coming year.

The end result for renters was startling: they said they only saw a 43.3% chance of owning a home, down from 51.6% in 2021 and the lowest reading since the survey began in 2014. .

The Federal Reserve is raising interest rates to calm inflation, which is at its highest level in 40 years. Mortgage rates have already risen ahead of schedule, with the average 30-year fixed rate at 5% last week, up almost two percentage points since the end of last year.

An industry survey released earlier on Monday showed confidence among U.S. single-family homebuilders fell to a seven-month low in April as rising housing borrowing costs and chains Tight supply conditions have pushed up housing costs and prevented some first-time buyers from entering the market. Read more

Join now for FREE unlimited access to Reuters.com

Reporting by Ann Saphir Editing by Chizu Nomiyama

Our standards: The Thomson Reuters Trust Principles.

Leave a Comment