Consumers expect house prices to rise 3.10% during the next 12 months, an increase of 10 basis points from March and the highest since December, according to the Federal Reserve Bank of New York’s April Survey of Consumer Expectations, released Monday.
The expected home price increase was on a steadily downward trend before the turnaround in December. It corresponds with an increase in inflation expectations, which consumers are now pegging at 2.6% for the 12 months ahead, up a tenth of a point from March.
The gauge of home price rises went up month-over-month in every region, led by the South with a reading of 3.26%, up 18 basis points from March’s 3.08%. Close behind were consumers in the West, who raised their expectations from 3.07% to 3.23%. This month’s reading of the Midwest and Northeast stood unchanged from March at 3.11% and 2.99%, respectively.
The gap among age groups broadened in April, in contrast to the nearly unanimous perception by all age groups in March. Relatively steady were the consumers aged over 60, whose price change expectation rose to 3.07% from last month’s 3.02%. Middle-aged buyers (between 40 and 60) foresaw a more volatile home market, with expectations rising from 3.00% to 3.44%, while young buyers aged below 40 put home price increases at 2.58%, down from 2.91% in March.
The median consumer expectation for household income growth in the coming 12 months rose to 2.83%, the highest since September 2015. This rebound has narrowed the gap between median household income growth and expected home price change.
The New York Fed interviews approximately 1,200 people from a rolling panel each month for the Survey of Consumer Expectations, and each respondent participates in the survey for up to a year. Read more about April survey results here >>.
More coverage of New York Fed Survey of Consumer Expectations from BUILDER>>.
