Renters are staunchly in favor of homeownership, and, though they have concerns about their ability to afford a home, more now believe it is easier to qualify for a mortgage.
According to the latest SCE Housing Survey, part of the Survey of Consumer Expectations (SCE) by the Federal Reserve Bank of New York, 72.3 percent of renters “prefer” or “strongly prefer” to own a home rather than rent one, and 55.9 percent view homeownership as “a good investment”—findings that dismiss a commonly held notion that they have become averse to homeownership as a result of societal shifts.
The likelihood of buying a home in the foreseeable future, however, both for homeowners and renters, is at a standstill: 63.6 percent, unchanged from 2016.
Sixty-five percent of renters view qualifying for a mortgage as “somewhat difficult” or “very difficult”, according to the survey—a share, though, that has steadily declined in recent years. Twenty percent view qualifying for a mortgage as “somewhat easy” or “very easy,” up from 15 percent in 2015.
One factor could pose a setback. Those surveyed believe mortgage rates have risen by at least 40 basis points this year—on par with their actual activity—and that the average rate one year from now will be 5.6 percent. Higher mortgage rates have the potential to sow apprehension among renters grappling with affordability.
Those surveyed, as well, anticipate home prices will continue to rise both one year and five years from now, expecting a 5.1 percent change in prices in the next year—the highest ever recorded in the survey. The likelihood that prices will fall in the next year, according to those surveyed, is down, to 37.5 percent.
Homeownership, overall, is viewed by 60.4 of those surveyed as a “somewhat good” or “very good” investment; only 12.7 percent view it as a “bad investment.”
Source: Federal Reserve Bank of New York