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The percentage of American renters who say they will someday own a home has plummeted over the past year as the housing affordability crisis continues and the American Dream appears to be out of reach.
The New York Fed’s 2024 SCE Housing Survey released Monday found that renters’ perceptions of the ease of obtaining a mortgage have “significantly worsened” since 2023.
A new survey from the New York Fed reveals that most American renters have given up hope of owning a home. (Reuters/Lucy Nicholson/Reuters Photo)
According to the survey, the percentage of renters who say it is somewhat or very difficult to get a mortgage has jumped to 74.2%, an increase of more than 8 percentage points from last year and well above the 2021 low of 50.5%. Ta.
At the same time, the percentage of renters who said they would eventually become homeowners fell to 40.1%, down 4.3 percentage points from last year and a new low in the 10-year span of the survey.
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The data also shows that Americans expect home prices to worsen further.
December 6, 2022. Home in Rocklin, California. Rising mortgage rates and skyrocketing home prices have brought the housing market to a near standstill, making affordability increasingly unaffordable. (Photographer: David Paul Morris/Bloomberg via Getty Images/Getty Images)
The housing survey, part of a broader survey of consumer expectations by the new Federal Reserve Bank, also found that next year’s expected rent price growth rate rose by 1.5 percentage points to 9.7%, making it the second highest rate in the survey since 2022. This was a high number.
U.S. households also expect mortgage rates to continue rising, with respondents saying they expect mortgage rates to rise to an average of 8.7% in one year and 9.7% in three years. Fed analysts noted that both of these averages are record highs.
A majority of aspiring homeowners say they can’t afford to realize the American Dream
The findings provide further evidence of the severity of the housing affordability crisis. in the united states It’s a burden on would-be homeowners and continues to escalate with no end in sight.
ResiClub co-founder and editor-in-chief Lance Lambert talks about the U.S. housing affordability crisis in “Making Money.”
The average interest rate on a 30-year fixed-rate mortgage has been above 7% for several weeks, according to Freddie Mac, and a recent report from Redfin shows that rising mortgage rates and rising home prices are leading to lower monthly home payments. It turns out that the median amount has reached an all-time high. The record was $2,775, an 11% increase from the same time last year.
High costs have put homeownership out of reach for many Americans. housing market Many prospective buyers and sellers have remained on the sidelines as affordability improves, stagnating for months.
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The Fed’s survey also found that more Americans are planning to stay put rather than move in the near future.
The authors conclude that “average expectations for residential mobility, or the likelihood of moving to another primary residence, hit record lows in both the one-year (13.4%) and three-year (24.5%) periods. , continues to decline.” Mobility trends since 2014. ”
