With appreciation climbing and equity growing, homeownership is considered by most Americans to be a solid path to wealth.
New research by the Federal Reserve Bank of New York indicates that 65 percent of Americans today believe that 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.
Confidence is high among those 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.
Rising home prices are fueling the enthusiasm. According to the survey, Americans anticipate home prices will increase 4.65 percent on average 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. The likelihood that homeowners will invest at least $5,000 on a project is at its highest since the inception of the survey: 34.4 percent.
Many respondents believe that mortgage rates will remain unchanged over the next 12 months. According to the study, 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.