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The expected change in home prices in the next year increased relative to twelve months earlier, without households expecting home prices to rise by 7.0%.
Source: Federal Reserve Bank of New York
DXY up +0.22%, EURUSD down -0.19%
The increase in home prices, despite rising mortgage rates, signals strong momentum in home prices in the last eighteen months.
Meanwhile, five-year expectations remained unchanged, with households expecting an annualized growth rate of 2.2 percent.
The divergence in the short-term and long-term projections signals that households expect strong home price growth in the short term but that prices will stabilize in the long term.
Respondents indicated higher one-and three-year expected mortgage rates relative to pre-pandemic levels. The expected 8.23% increase in three years is the highest level in 9 years.
71% of respondents indicated that housing is a “good” or “very good” investment, a decline from 73.6% in February 2021.
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