Housing Price and Rent Growth Expectations Increase

Economics
Published

Households expect home price growth to increase to 5.1% over the next 12 months, up from 2.6% a year ago, according to the Federal Reserve Bank of New York’s 2024 SCE Housing Survey that was released this week. This is the second highest reading in the survey’s history, but below the series high of 7% in 2022.

The increase is broad based across demographic groups, but particularly large for respondents residing in the South.

The survey also looked at household expectations for mortgage rates and how it might impact financing decisions, as well as renters’ expectations for rent prices and the possibility of homeownership.

Mortgage Market

Households anticipate mortgage rates to rise to 8.7% a year from now and 9.7% in three years’ time, both numbers a series high. But households on average still believe there is a 61% chance that mortgage rates will fall over the next 12 months, which is also a series high.

Home owners’ expected probability of refinancing in the next year rebounded slightly to 6.3% from 4.1% last year, but remained well below the pre-pandemic average of 10.4%.

Rental Market

Households also expect rents to increase by 9.7% over the next 12 months, compared with 8.2% in February 2023, reversing last year’s decline.

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%. Renters’ self-assessed probability of ever owning a home decreased by 4.3 percentage points to 40.1%, which also reflects a series low.

Housing Remains a Good Investment

Although attitudes toward housing as a financial investment remained strongly positive, they weakened slightly from the previous year, as 67.1% of all respondents characterized buying property in their zip code as a “very good” or “somewhat good” investment. This is slightly below the readings of the last three years, but still above the levels of optimism that prevailed in the pre-pandemic period.

The SCE Housing Survey, which has been fielded annually in February since 2014, is part of the broader Survey of Consumer Expectations. Learn more about the survey, including additional data, at newyorkfed.org.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Education | Remodeling | Certified Aging-in-Place Specialist (CAPS) | Economics

Jun 16, 2025

Practical Strategies for Aging-in-Place Remodels

Seventy-three percent of industry leaders say that requests for aging-in-place (AIP) features have increased in the last five years, and 56% of remodelers are involved in home modification work relating to AIP, according to the NAHB/Westlake Royal Remodeling Market Index. Learn more about AIP practices on July 10 during NAHB's AIP Shop Talk.

Construction Statistics

Jun 16, 2025

Permit Activity Declines for Fourth Consecutive Month

Housing permits continued a downhill trend for the fourth month in a row, pointing to a broader residential construction slowdown for 2025. Single-family permits were down in three out of four regions, while multifamily permits were up in three out of four regions. See the 10 largest markets for single-family and multifamily activity.

View all

Latest Economic News

Economics

Jun 16, 2025

Permit Activity Weakens in April 2025

Housing permits continued a downhill trend for the fourth month in a row, pointing to a broader residential construction slowdown for 2025. Over the first four months of 2025, the total number of single-family permits issued year-to-date (YTD) nationwide reached 320,259.

Economics

Jun 13, 2025

Household Real Estate Asset Value Falls to Start the Year

The market value of household real estate assets fell from $48.1 trillion to $47.9 trillion in the first quarter of 2025, according to the most recent release of U.S. Federal Reserve Z.1 Financial Accounts. The value of household real estate assets declined for three consecutive quarters after peaking at $48.8 trillion in the second quarter of 2024 but remains 2.1% higher over the year.

Economics

Jun 12, 2025

Producer Prices Rise in May: New Construction Input Analysis

Prices for inputs to new residential construction—excluding capital investment, labor, and imports—rose 0.2% in May, following a (revised) decrease of 0.2% in April. These figures are taken from the most recent Producer Price Index (PPI) report published by U.S. Bureau of Labor Statistics.