More and more consumers believe that the time is right to buy a house, according to an annual survey by the Federal Reserve Bank of New York. The New York Fed’s Survey of Consumer Expectations (SCE) Housing Survey, conducted in February 2016 and just recently released, showed a substantial increase in the percentage of consumers who plan to become homeowners in the near term.
Conditional on moving within three years, the average probability of buying a home rose from 59.9 percent in 2015’s SCE Housing Survey up to 63.0 percent for 2016’s survey. According to the New York Fed, the average probability of buying a home was especially pronounced among renters—the share of renters who said they plan to buy a home jumped from 43.2 percent up to 48.9 percent, according to the New York Fed.
Renters continued to show a strong preference to owning a home; whereas in 2015, 68.5 percent of renters said they preferred or strongly preferred to own, provided they had the financial resources to do so. That share shot up to 74.2 percent in 2016. And though renters still generally perceive that obtaining a mortgage would be difficult, that percentage has shown steady improvement over the previous two surveys (12.8 percent in 2014, 14.7 percent in 2015, up to 17.5 percent in 2016).
The attitudes toward housing remained generally positive, with 59.2 percent of respondents saying they think that buying a property in their zip code is a good investment, compared to only 13.2 percent who said they believe it is a bad investment. The share of respondents who said housing is a very good investment has risen from 14 percent in 2014 up to 21 percent in 2016; however, the percentage of respondents who said they believe housing is a bad investment more than doubled during that same period (1.3 percent up to 2.9 percent), according to the New York Fed.
A recent survey from Redfin indicated that high rents, brought on by an increase in demand for rental housing due to the tight supply of homes for sale, are starting for force renters to become homeowners. The survey, which covered 975 homebuyers in 36 states and Washington, D.C., in May, reported that one in four respondents said the high cost of rent prompted them to search for a home to buy.
The February 2016 SCE Housing Survey was the third annual installment of the survey conducted by the New York Fed.