Consumers grow less optimistic about steep home prices

More people doubt that accessing credit will get any easier

Consumers grow less optimistic about steep home prices

With economic inflation in mind, more Americans doubted that high home prices would change in the next 12 months, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data.

Data from the August 2019 Survey of Consumer Expectations showed that median home-price change expectations have hit a new series low of 2.9%. The drop was the first since December 2018, after eight consecutive readings of 3%.

The report also revealed that people have started to find easier access to credit. The share of people who faced a harder time accessing credit declined two percentage points to 25.5% in August.

But respondents still carry a pessimistic view. The percentage of respondents who expect easier credit access 12 months from now fell to 17.9%, while those who are bracing for tougher credit conditions next year from rose to 33.9%.

However, fewer people predicted that they would miss the payment for their loans over the next three months. The average perceived probability of a missing a minimum debt payment went down from 11.7% to 11.1%, staying below the 12-month average of 11.9%.

Median expected household income growth also dropped for the second straight month, edging down to 2.7% from 2.9% in July. Meanwhile, 3.2% of households believed that they will spend more next year.

Perceptions about household financial situations for the next 12 months also weakened, with fewer respondents reporting and anticipating to be better off financially.