A New York Fed survey shows 1-year and 3-year look ahead moving expectations are at record lows. 
I picked up this story from a friend who sent a link to an inaccurate CNBC article: Renters’ hopes of being able to buy a home have fallen to a record low, New York Fed survey shows
[Mish note – This is incorrect, see below] The share of renters who believe that they one day will be able to afford a home, fell to a record low 13.4%, according to a New York Federal Reserve survey released Monday.
That is strikingly inaccurate. What the survey shows is the probability of moving fell to a record low of 13.4 percent.
And as is typical of mainstream media articles, the author did not link to the report or the data making it not so easy to spot the error.
New York Fed Survey
Let’s take a look at the actual NY Fed press release Housing Price Growth Expectations Increase; Renters Express Concern for Ability to Own a Home
- Average expectations of residential mobility, the percent chance of moving to a different primary residence, fell to new series lows at both the one-year (13.4%) and three-year (24.5%) horizons, continuing a declining mobility trend since 2014.
- On average, households perceive that national mortgage rates are currently higher than pre-pandemic levels and expect them to rise further in the future. Households now expect mortgage rates to rise to 8.7% a year from now and 9.7% in three years’ time, both of which are series highs. Still, households on average believe there is a 61% chance that mortgage rates will fall over the next 12 months, which is also a series high.
- Homeowners’ expected probability of refinancing rebounded slightly to 6.3% after falling for the last two years. It remains well below the pre-pandemic average of 10.4%.
- Renters’ perceptions about the ease of obtaining a mortgage deteriorated substantially, as 74.2% stated that obtaining a mortgage is somewhat or very difficult. This represents an 8.4 percentage point increase from last year, and is well above the 2021 low of 50.5%. Further, renters’ self-assessed probability of ever owning a home decreased by 4.3 percentage points to 40.1%, which also reflects a series low.
New York Fed Rent Increase Expectations
The average renter expects their rent will go up another 9.7 percent in the next year.
Ease in Obtaining a Mortgage
Mortgage Notes
- A record 46.0 percent say it is very difficult to obtain a mortgage.
- A record 74.2 percent say it is somewhat to very difficult to obtain a mortgage.
- A record low 10.1 percent say it is very to somewhat easy to obtain a mortgage.
Probability of Renters Buying a Home
Probability of Renters Buying a Home
- Twenty-five percent of renters have essentially given up on the idea of ever owning a home.
- The median expectation is a mere 35 percent.
- The average expectation is 40.1 percent.
All of those are record lows.
Trapped In Your Home and Trapped Renting
The lead chart shows a record number of people are trapped in their homes, unable or unwilling to trade a 3.0 percent mortgage for a mortgage well over 7.0 percent.
The remaining charts show record numbers of people expect further steep increases in the cost of rent, unable to do anything about it.
Home Prices Hit New Record High
The Case-Shiller national home price index hit a new high in February. That’s the latest data. Economists don’t count this as inflation.
On May 2, I noted Home Prices Hit New Record High, Don’t Worry, It’s Not Inflation
The Case-Shiller national home price index hit a new high in February. That’s the latest data. Economists don’t count this as inflation.
Are You Better Off Now Than Four Years Ago?
On April 10, I asked Are You Better Off Now Than Four Years Ago?
I address the question from the standpoint of real (inflation adjusted) hourly earnings and assets, specifically home ownership.
People Who Rent Will Decide the 2024 Presidential Election
Immigration won’t decide the election. Polls have not yet captured what will. This may come as a surprise, but the top issue housing. More explicitly, it’s shelter costs.
Image courtesy of Axios + Generation Lab Youth Poll
On April 20, I posted People Who Rent Will Decide the 2024 Presidential Election
Q: Who are the renters?
A: Young voters and blacks who are abandoning Biden in massive numbers.
They are upset over rent and being priced out of a home.
Its 9% rent hikes imminent for apartments? If I believed that I would sell my house, move to an apartment, and invest in apartment REITs. Apartments are overbuilt in most places.
boo hoo – our 2 oldest – one 29 other 26(just sold 1st home) own homes for past 5 years
both make LIVING WAGE
youngest – no college but cashed out with $150k on 1st home – now getting permits to build new home using C A S H
our youngest just graduated – all had $$0 student loan debt
and AS PARENTS we did not help with tuition/books/etc. – they’re A D U L T S and need to pay own way
Only a significant deterioration in my health would motivate me to sell and move, thanks to low property taxes (under California’s Proposition 13). Selling the house would trigger a large capital gains tax.
A large family sized tent is 10,000x cheaper than a home in California right now.
How many of those are boomers pretending they’re gonna live in their McMansion until they die?
Expectations have little effect on outcomes.
I can *get* the mortgage but I can’t *afford* the mortgage, property tax, insurance (if I can even get it), overhead, etc. The housing market, especially in California with Prop 13, is badly broken. One more big reason to run for the border.
It would be interesting to see how many young people who are still living at home with mom and dad, want to move out, but can’t afford it.
They technically aren’t renting/currently own so would this group be captured in any of these surveys? I’m sure there is some pent up rent/buy demand in that group.
Everything is such a mess now. It’s gonna take quite a long for all of this to work itself out.
At the limits of monetary possibility
Posted on May 7, 2024
HOW DOES THIS END?
On two occasions in modern times, central banks have found themselves obligated to pour huge amounts of newly-created money into the system. The first instance was the global financial crisis of 2008-09, and the second was the coronavirus pandemic of 2020-21.
Neither of these events was anticipated, though the first one certainly should have been. You would have to be very brave indeed to bet against another out-of-the-blue shock forcing central bankers back into flooding the economy with liquidity.
In fact, the very structure of the financial system makes a future shock inescapable. Over the past twenty years, and depending on the definitions used, each dollar of growth in the global economy has been accompanied by between $3 and $8 of newly-created financial liabilities.
Simply stated, the financial system has been allowed to grow far more rapidly than the underlying economy itself, and this creates a wholly unsustainable set of trends which will lead to a drastic reset of the relationship between the economy and the financial system.
This has happened because we’ve been trying to counter, whilst at the same time denying, structural deterioration in the global economy. Driven by the depletion of oil, natural gas and coal resources, the material costs of energy have been rising relentlessly, and, contrary to widespread assurances, renewables cannot provide a new source of abundant low-cost energy to the economy.
In essence, we’ve been trying to overcome material economic deceleration with monetary stimulus, a technique that cannot work, but for which no alternative exists.
As you may know, we have a limitless capability for the creation of money, but the banking system can’t lend energy or other natural resources into existence, and central banks cannot conjure them out of the ether.
Building the next crisis
link to surplusenergyeconomics.wordpress.com
Money is a promise, not a guarantee.
“Are you better off than you were 4 years ago?”
Just remember what happened 4 years ago. An economically and socially damaging and budget busting pandemic occurred that was the direct result of a lab leak of a bat virus from a research facility in Wuhan China. That virus was modified with a spike protein on a furin cleavage site. Who authorized this dangerous gain of function research that created the virulent SARS-CoV-2 virus? The Donald Trump Administration. In 2017 the Trump Administration ended a moratorium on GoF research that was put in place by the Obama Administration in 2014. [see Natural article].
link to nature.com
Remember Trump’s dismissive attitude towards government regulations? The fool removed a regulation that was critical in protecting the public from a a man-made pandemic. And all of Trump’s buddies got big pay days thanks to this disaster. Trump’s first FDA Commissioner left his post in the summer of 2019 just ahead of the lab leak. He was immediately hired by Pfizer. Trump’s second FDA Commissioner was another puppet for Big Pharma. He left in January 2021 and was quickly hired by Moderna. Corruption at it’s finest courtesy of the so-called “Man of the People”.
What else happened 4 years ago? Trump gave Ukraine lethal aid. That irresponsible decision sowed the seeds of war. Trump also moved the US embassy in Israel to Jerusalem, act that gave the corrupt Netanyahu government a PR win to stave off the collapse of his ruling collation. Had Trump not done such a foolish thing the current genocide possibly would not have occurred. The world is burning, inflation is still lurking, a sovereign debt crisis is beginning to materialize and Trump steered us down this path. Time to realize that MAGA is a scam and Trump is both a fraud and an idiot.
I don’t often say this but it needs to be said: Take your illness elsewhere. Trump was so responsible for Ukraine that Biden has been unable to unwind it or broker any peace and instead pushes for more war funding! Pay no attention to the Obama-led coup in 2014 within Ukraine as a possible cause. Trump was so responsible for Covid that every attempt to get unredacted truth out to the public and truthful responses from the government during the pandemic, much of it during the Biden administration, has been met with obfuscation, redaction, and stonewalling despite the government being led by Joseph R Biden for nearly 4 years since. Trump’s moving the embassy to the diplomatic capital of Isarael was so outlandish that Hamas felt compelled to attack on Ocotber 7th 2 years after Trump left office and Biden’s response was to push for billions to send weapons? Goodness gracious!
You have a sickness, get help.
This post was about housing for God’s sake. I guess do whatever you need to deflect from the economic malaise this post is covering and run cover for the Biden Administration.
A 9.7% mortgage rate in three years would solidify the truth, that a 0% FED Funds rate, at some point over the next three years, will fool no one this time around.
The FED is trapped.
– As is typical of mainstream media articles, the author did not link to the report or the data making it not so easy to spot the error.
> Precisely why the MSM, cannot ever be trusted. The lie for manipulation, personal agendas, who’s paying, etc. a Grift is all…
– Mortgage Notes:
– A record 46.0 percent say it is very difficult to obtain a mortgage.
> The Median Household Income is only 55K
– A record 74.2 percent say it is somewhat too very difficult to obtain a mortgage
> Absolutely No Surprise, as Household Income for 40% alone is only 78% of the Median, and 20% are only at 40%…
– A record low 10.1 percent say it is very to somewhat easy to obtain a mortgage.
> And 12% have a household income of 112K+
Probability of Renters Buying a Home:
– Twenty-five percent of renters have essentially given up on the idea of ever owning a home.
> And 20% are only at 40% of the Median Income
– The median expectation is a mere 35 percent.
> And 40% are only at 78% of the Median Income
– The average expectation is 40.1 percent.
> And 40% are only at 78% of the Median Income
– All of those are record lows.
> Welcome to Biden’s America…
Case Schiller index is up 47% since Jan. 1 2020. Stock market up about 50%. Not surprising after a $13 trillion financial bailout of the system.
For the last 10 years, people have been predicting a crash of the Australian and Canadian housing bubbles, but the prices keep going higher and higher.
I guess the lesson is buy now, because today’s prices will seem cheap 10 years from now.
While the obscene cost-of-housing is being slowly ingrained into the collective psyche…
lost in the discussions everywhere seem to be the ?? number of people who could “afford” to buy/move, but refuse to overpay for a house.
Currently getting 5k a month in interest on the money I have saved for a house. I’ll buy if I see something I think is worth the money.
Ironically it’s the people who can’t afford a home who are trapped.
May not be able to afford a home but they will be able for afford a Tesla as the prices of used Tesla’s plummet towards ZERO
Live in a Tesla. Not a bad idea. Cheap housing. Premier parking at the grocery store. Free electricity.
A Pontiac Aztec even better
I think a lot of people who live near the coasts or gulf coast will be involuntarily moving to higher ground by 2030.
If you took away the mortgage and said all houses had to be paid for at the time of sale, housing would become affordable overnight. Housing is going to be a fungible asset for many on the coast.
Wife was wanting to buy Heavy Winter Clothing and move to the Equator in the mid-1970s and Freeze to death there! That was after, No More Oil from the Arabs! // Then we were recently gully-washed with “Everyone will own an EV and Electric Everything” by the end of the 2020s. // Now EVs can’t be given away and there are massive storage yards of Chinese EVs with no buyers at Antwerp and other European ports (search online). // I’m grateful to be 77 and soon leaving the every worsening Insanities! The End is indeed near! ❤️ Mark 12:30-31
None of this will be a problem.
AI will fix everything everywhere for everybody.
link to msn.com
Anywhere between 6 to 8 inches higher than 2010.
In addition to high interest rates and lack of houses on the market there is a problem with new construction prices. A LOT of builders won’t guarantee the price of a new construction home. Most construction takes 6 months – 1 year. Pricing on materials can significantly increse during that time. I looked into MULTIPLE states/areas when we were looking to move out of IL. KS was the only place we could find a builder that would guarantee a price. He’s able to offer firm prices as he bought materials/products in bulk. He doesn’t offer any options. We’re going to make a lot of changes in options (i.e. flooring, cabinets, etc.) after we buy the home. The cost of these changes are still a lot cheaper than what we budgeted for when buying a new construction home.
This is why the smart folks paid for their meal before the menu prices could change.
Don’t worry folks. The “Everything Bubble” is contained just like subprime!
Yup, “it’s only transitory”.
Stuck. Could be worse I suppose.
You could be stuck AND underwater by well over six figures; that was the norm in the last housing market crash.
Unless you NEED to move and you own a home, why would you? if your interest rate is 3-5%, there is zero reason to sell even if you have lots of equity.
If I were to sell I would also lose my property assessment freeze and have to start over.
“Notice that the current extreme is just shy of those observed in August 1929 and January 2022. The current level is about three times the historical norm. We’ve seen this sort of valuation extreme before, but as Jeremy Grantham observed, “you’ve only seen it once or twice.”
link to hussmanfunds.com
RULE #1 = “Buy low, SELL High”. This is a MEGA high!
Sell high.
Rent higher.
Rent even higher every few years.
New York FED moving expectations at record lows.
Is it the same as when a bird of prey plucks feathers from its quarry, and then watches how it struggles to fly?
People are realizing that Florida isn’t this great wonderful state so why move there.
Yep.Sea levels have risen by 8 inches since 2010. The gulf coast and Atlantic coast has a huge problem on their hands.
“When averaged over all of the world’s oceans, absolute sea level has risen at an average rate of 0.06 inches per year from 1880 to 2013 (see Figure 1). Since 1993, however, average sea level has risen at a rate of 0.12 to 0.14 inches per year—roughly twice as fast as the long-term trend.”
link to epa.gov.
0.14 inches per year times 14 years is 1.96 inches, not 8 inches.
As it happens the Gulf coast and much of the Atlantic coast are subsiding for geological reasons. That is why much of New Orleans is below sea level.
Whatever the reason, it is 6-8 inches since 2010. It will cause a mass migration at the going rate.
Don’t you bring mathematics into this! Jesus is in charge of the ocean.
link to msn.com
Anywhere between 6 to 8 inches higher than 2010.
Luckily for the deniers, their diaper may be used as a flotation device.
The only shock would be is if didn’t happen. In ancient times, epic floods that wiped out civilizations all the time. The planet is a changing entity.
link to msn.com
Anywhere between 6 to 8 inches higher than 2010.
Don’t idiots bring anacondas from South America and Pythons from India and throw them in the Everglades?
We had walking-catfish years ago. Haven’t heard much about them in a long time.
I do feel trapped. And I would trade my gains to be able to move laterally with prices not in a bubble.
“Notice that the current extreme is just shy of those observed in August 1929 and January 2022. The current level is about three times the historical norm. We’ve seen this sort of valuation extreme before, but as Jeremy Grantham observed, “you’ve only seen it once or twice.”
link to hussmanfunds.com;
RULE #1 = “Buy low, SELL High”. This is a MEGA high!
I wonder what impact this has had on labor mobility.
It’s the monkey with his hand in the candy jar. Has a fistful of candy, but can’t let go to remove his hand from the jar.
No, I won’t be giving up my 2.8% mortgage for a 7%. I understand 2.8 will likely never happen again but I would move at 5%.
I’ll move at any interest rate as long as the 100% to 400% bubble PRICE increases over 3 year’s time gets erased and we deflate back to semi-sane times of 2019 or earlier
I might move when long-term CD rates are higher than mortgage rates 😉