Trapped In Your House? Moving Expectations Hit Record Low

A New York Fed survey shows 1-year and 3-year look ahead moving expectations are at record lows.

I picked up this story from a friend who sent a link to an inaccurate CNBC article: Renters’ hopes of being able to buy a home have fallen to a record low, New York Fed survey shows

[Mish note – This is incorrect, see below] The share of renters who believe that they one day will be able to afford a home, fell to a record low 13.4%, according to a New York Federal Reserve survey released Monday.

That is strikingly inaccurate. What the survey shows is the probability of moving fell to a record low of 13.4 percent.

And as is typical of mainstream media articles, the author did not link to the report or the data making it not so easy to spot the error.

New York Fed Survey

Let’s take a look at the actual NY Fed press release Housing Price Growth Expectations Increase; Renters Express Concern for Ability to Own a Home

• Average expectations of residential mobility, the percent chance of moving to a different primary residence, fell to new series lows at both the one-year (13.4%) and three-year (24.5%) horizons, continuing a declining mobility trend since 2014.
• On average, households perceive that national mortgage rates are currently higher than pre-pandemic levels and expect them to rise further in the future. Households now expect mortgage rates to rise to 8.7% a year from now and 9.7% in three years’ time, both of which are series highs. Still, households on average believe there is a 61% chance that mortgage rates will fall over the next 12 months, which is also a series high.
• Homeowners’ expected probability of refinancing rebounded slightly to 6.3% after falling for the last two years. It remains well below the pre-pandemic average of 10.4%.
• Renters’ perceptions about the ease of obtaining a mortgage deteriorated substantially, as 74.2% stated that obtaining a mortgage is somewhat or very difficult. This represents an 8.4 percentage point increase from last year, and is well above the 2021 low of 50.5%. Further, renters’ self-assessed probability of ever owning a home decreased by 4.3 percentage points to 40.1%, which also reflects a series low.

New York Fed Rent Increase Expectations

The average renter expects their rent will go up another 9.7 percent in the next year.

Ease in Obtaining a Mortgage

Mortgage Notes

• A record 46.0 percent say it is very difficult to obtain a mortgage.
• A record 74.2 percent say it is somewhat to very difficult to obtain a mortgage.
• A record low 10.1 percent say it is very to somewhat easy to obtain a mortgage.

Probability of Renters Buying a Home

Probability of Renters Buying a Home

• Twenty-five percent of renters have essentially given up on the idea of ever owning a home.
• The median expectation is a mere 35 percent.
• The average expectation is 40.1 percent.

All of those are record lows.

Trapped In Your Home and Trapped Renting

The lead chart shows a record number of people are trapped in their homes, unable or unwilling to trade a 3.0 percent mortgage for a mortgage well over 7.0 percent.

The remaining charts show record numbers of people expect further steep increases in the cost of rent, unable to do anything about it.

Home Prices Hit New Record High

The Case-Shiller national home price index hit a new high in February. That’s the latest data. Economists don’t count this as inflation.

On May 2, I noted Home Prices Hit New Record High, Don’t Worry, It’s Not Inflation

The Case-Shiller national home price index hit a new high in February. That’s the latest data. Economists don’t count this as inflation.

Are You Better Off Now Than Four Years Ago?

On April 10, I asked Are You Better Off Now Than Four Years Ago?

I address the question from the standpoint of real (inflation adjusted) hourly earnings and assets, specifically home ownership.

People Who Rent Will Decide the 2024 Presidential Election

Immigration won’t decide the election. Polls have not yet captured what will. This may come as a surprise, but the top issue housing. More explicitly, it’s shelter costs.

Image courtesy of Axios + Generation Lab Youth Poll

On April 20, I posted People Who Rent Will Decide the 2024 Presidential Election

Q: Who are the renters?
A: Young voters and blacks who are abandoning Biden in massive numbers.

They are upset over rent and being priced out of a home.