An annual survey of consumer expectations for housing, released this week by the Federal Reserve Bank of New York, showed that Americans expect the average mortgage rate to reach 8.4% in 12 months and 8.8% in the next three years.
In last year’s survey, buyers predicted rates to hit 6.7%, close to what was recorded in early March. before they fell during the recent banking crisis.
According to this year’s survey, Americans expect home prices increase 2.6% from this year to next, the lowest forecast recorded since the survey began in 2014.
In accordance with yahoo financethe expectation of higher rates may reflect that Americans are accepting of the higher rate environmentafter at least a decade in which they never reached 5%.
Despite housing challenges, the majority of Americans, 68.4%, still think they buying a house is a good investment. While that’s a bit lower than a year ago, it’s still above pre-pandemic levels.
Similarly, only 7.9% of those surveyed think buying a home is a bad or somewhat bad investment, up from 9.9% a year ago.
Furthermore, the proportion of Americans who believe that will move to a primary residence different in the next 12 months or in the next three years fell to minimum numbers.
Rapidly rising rates have also sunk homeowners’ refinancing chances, with just 4.1% of those surveyed saying they they expected to refinance their mortgage in 12 monthsup from 7.7% a year ago and marking an all-time low since the survey began in 2014.
Home values only grew 3.8% year-on-year in January, up from 5.6% the previous month, according to the index released Tuesday. The values they also fell month-over-month by 0.55%registering the seventh consecutive monthly drop.
One of the main reasons homeowners may be reluctant to move to another primary residence is because of their current mortgage rate, which is likely to be lower than the rate prevailing now or the rate expected 12 months from now.
According to Redfin, 85% of homeowners had a rate below 6% as of September 2022.
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Source: La Opinion