Americans continue to think that housing is a good financial investment.
The Federal Reserve Bank of New York recently released results from its 2019 SCE Housing Survey, which found that nearly two-thirds of respondents reported that buying a home in their ZIP code is a “very good” or “somewhat good” investment, equal to the optimism found in the 2018 survey. Less than 10% said that housing was a “bad” investment, a decline from 2018.
The report predicted that next year, home prices will rise 3.6%, and over the next five years, we will see increases of 2% per year. Both of these percentages are below last year’s expectations. However, rents are expected to increase substantially. In the next year, it is expected rents will rise 7.3%, the same prediction as last year, and over five years, it will go up 4.5% per year, an increase of 0.2% from last year’s forecast.
And homeowners are willing to put more into their homes. Nearly 38% of owners plan to spend at least $5,000 on their home in the next year, the percentage rises to 48% when the time period is extended to three years.
Close to three quarters of renters surveyed said they would rather own than rent, especially those renters who are 50 and older. However, obtaining a mortgage makes many shy away. Fifty-eight percent of renters said obtaining a mortgage would be “somewhat difficult” or “very difficult”. Yet, 21% said it would be “easy” or “very easy,” the highest percentage in five years. Renters who believe they will become homeowners hit 52.4%, up from 49.5% last year.