Key Takeaways
- Only about 34% of renters see the probability of owning a home, according to a New York Federal Reserve survey.
- The survey showed that a strong majority still would prefer homeownership, as 72% see it as more beneficial than renting.
- Housing affordability issues aren’t expected to ease anytime soon, as survey respondents saw mortgage rates hovering around 7% for the next three years.
The hope of fulfilling the “American dream” of home ownership is continuing to fade out of sight for many.
A New York Federal Reserve survey showed that renters put the probability of owning a home in the future at 34%, down from 40% in last year’s survey and the lowest result in the survey’s 10-year history. A decade ago, renters saw a 53% chance of home ownership in their futures, a sentiment that has markedly declined as home affordability constraints persist.
“Housing affordability is near its lowest level in three decades, and many buyers have been priced out of the market,” said Matthew Walsh, Moody Analytics economist.
Home Affordability Challenges Expected to Persist
The survey showed that home affordability issues aren’t expected to improve much. The median expectations for the 30-year fixed-rate mortgage were 7% for both next year and for three years from now, the highest ever for the survey first conducted in 2014. Current mortgage rates are around 6.7%, which have moved lower over the past month.
Respondents believe home prices will increase by 4% over the next year, around the current rate of growth.
However, while homeownership costs continue to rise, most respondents to the survey believed it was worth it, with 72% saying they either “prefer” or “strongly prefer” owning their residence, as compared to renting.
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