With appreciation climbing and equity growing, homeownership is the investment to make—and according to new research, Americans believe it is a solid vehicle for wealth.
Sixty-five percent of respondents to a survey by the Federal Reserve Bank of New York believe buying a home is a “somewhat good” or “very good” investment; less than 11 percent believe it is “bad.” Among buyers, the likelihood of a purchase is 63.9 percent, a slight uptick from 63.6 percent in 2017.
The confidence is considerable among Americans who have a Bachelor’s degree or higher, an income of $60,000 or higher, and/or skew younger. There is also greater optimism among respondents on the West Coast.
Encouraging the enthusiasm are growing home prices. According to the survey, Americans anticipate home prices will increase (a mean) 4.65 percent in 2018. Additionally, the likelihood prices will retreat sunk to 27 percent, a decline from 29 percent in 2017.
With feel-good sentiment comes more home improvements and remodels, and the likelihood homeowners will invest at least $5,000 on a project is at its highest since the inception of the survey: 34.4 percent.
When it comes to mortgage rates, the average belief is that they will remain unchanged in a year’s time; however, the likelihood that rates will rise went up to 55 percent, from 52 percent in 2017.
All data is from the Federal Reserve Bank of New York’s February 2018 Survey of Consumer Expectations (SCE) Housing Survey.