The dream of owning a home seems increasingly out of reach for many renters in the U.S., according to the latest survey from the New York Federal Reserve. Released on Monday, the 2024 SCE Housing Survey paints a grim picture of renters’ perceptions about homeownership prospects.
The survey reveals a stark decline in renters’ confidence in obtaining a home mortgage, with a significant 8-percentage point increase from last year. Now, a staggering 74.2% of renters find it somewhat or very difficult to secure a mortgage, compared to just over half in 2021.
Moreover, the survey highlights a worrying trend: fewer renters believe they will ever become homeowners. Only 40.1% of renters now hold onto that dream, marking a 4.3-percentage point drop from last year and hitting a new low in the survey’s decade-long history.
Adding to the gloom, Americans foresee a worsening housing affordability crisis. Rent price growth expectations for the next year have climbed to 9.7%, the second-highest level since 2022. Additionally, households anticipate mortgage rates to rise further, reaching an average of 8.7% in a year and 9.7% in three years, both reaching series highs.
These findings underscore the severity of the housing affordability crisis, which continues to hinder aspiring homeowners without any signs of improvement. With the average 30-year fixed-rate mortgage surpassing 7% and median monthly housing payments hitting a record $2,775, homeownership remains out of reach for many Americans.
Consequently, the housing market has stalled, with potential buyers and sellers sidelined, waiting for affordability to improve. The Fed’s survey also reveals a reluctance among Americans to relocate, with average expectations of residential mobility hitting new lows at both one-year and three-year horizons.
Overall, the survey paints a bleak picture of the housing market, indicating that the affordability crisis is deepening and mobility is declining, further exacerbating the challenges faced by renters and prospective homeowners alike.
