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.
Millennials want to buy homes, but rising prices hold them back
Americans could owe $4 trillion by the end of the year