Just 43.4 percent of renters believe that they will ever own a home, according to a new survey.
The current figure is the first time that the percentage has dropped below 50 percent in the history of the Federal Reserve Bank of New York’s survey on the issue, which began in 2014.
“Renters reported a sharp decline in their probability of owning a home in the future, from 51.6% in 2021 to 43.3% this year. The current reading is a series low and is well below 50% for the first time since 2014,” the bank said in a press release about the survey.
The pollsters report that to understand why renters report being less likely to buy if they were to move, they asked how changes in home prices over the past year have affected their housing plans.
“Twenty-two percent of households reported that they had planned to purchase a home but now view renting as a better financial decision. About 13 percent of respondents stated that the recent increase in home prices had prompted them to speed up their search to purchase a home over the past year,” a blog post accompanying the poll results explained. “However, the majority of respondents either preferred to rent (36 percent) or said they were waiting for prices to come down before buying (42 percent). We also asked renters how likely it was that they would own a home at some point in the future. The average likelihood fell below 50 percent for the first time in the series’ history.”
The researchers also found that respondents expect a sharp rise in rent prices over the next year. On average, those surveyed expect rent to increase by 11.5 percent, compared to just 6.6 percent in last year’s poll.
“This increase was even more pronounced among current renters, who expect rents to rise by 12.8 percent one year from now compared to 5.9 percent one year ago. This is consistent with the idea that short-term rent expectations are being shaped by the sharp increases in rent that have occurred in recent months. The expected price of rent five years from now rose to an annualized increase of 5.2 percent, compared to 4.4 percent a year ago,” the survey found.
The 2022 survey polled 1,242 respondents, about one-quarter of whom are current renters while the remaining three-quarters are homeowners.