Americans are preparing for another wave of increased housing expenses, with renters expressing heightened doubts about their prospects of owning a house, according to the Federal Reserve Bank of New York.
Americans Brace for Higher Housing Expenses
In its latest Survey of Consumer Expectations, the regional Federal Reserve Bank discovered that respondents anticipated a rise in both rent and home prices in the near term while also bracing for continued high mortgage rates.
According to Reuters, the survey revealed that respondents foresee a significant jump in home prices over the coming year, expecting a 5.1% increase compared to the 2.6% predicted a year earlier. However, the outlook for home prices over a five-year horizon was projected to be 2.7%, from last year's poll of 2.8%.
Respondents predicted a substantial 9.7% increase in rental prices over the next year, marking the second-highest reading in the survey's history - up from 8.2% in the previous year's poll. Respondents foresee rental costs remaining relatively steady in a five-year span, at 5.1%.
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Dwindling Optimism on Homeownership
The report also highlighted respondents' dwindling optimism about homeownership. A record low number of individuals indicated strong prospects of purchasing a home in the future.
Additionally, respondents expect mortgage rates to continue climbing. The survey indicates forecasts of an average mortgage rate of 8.7% within a year and 9.7% within three years.
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