Consumers see housing as good financial investment – survey

by Francis Monfort06 Jul 2018

A majority of US households held a more positive attitude toward housing as a financial investment in 2017 than a year ago, according to the SCE Housing Survey released by the Federal Reserve Bank of New York.

The survey found that 65% of all respondents think that buying property in their zip code is a “very good” or “somewhat good” investment, compared to 60% in 2016. Meanwhile, 10.6% of them said housing is a “bad” investment.

The favorable view on housing was particularly pronounced among younger, more educated (bachelor’s degree or more), and higher-income (annual income of $60,000 or more) households. The survey, which provides information on consumers’ housing-related experiences and expectations, is part of the broader Survey of Consumer Expectations.

Additionally, households continued to have stable expectations for home-price growth relative to the previous year. For example, the mean one-year-ahead expected change in home prices in 2018 was 4.65%, which is only slightly below last year’s 5.1% and the second-highest level since the inception of the survey in 2014. Five-year growth expectations average 3% per year, which is slightly higher than last year.

The survey also found a decline in the average probability of mortgage refinancing over the next year for homeowners to 8.9% from 10.2% in 2017. Renters who want to buy a home continue to perceive obtaining a mortgage as difficult. Renters continue to report a strong preference for owning homes, although it weakened relative to the previous two years, the survey found.


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