Are you a renter dreaming of becoming a homeowner? Well, the latest data from the New York Federal Reserve might dampen those hopes a bit. According to their survey, the share of renters who believe they will one day be able to afford a home has reached a record low of 13.4%.
What’s standing in the way of renters’ homeownership dreams? Higher housing costs and elevated interest rates, for starters. The survey found that 74.2% of renters see obtaining a mortgage as difficult, a number that has significantly increased from previous years.
And speaking of mortgage rates, they’re currently at a 7.22% borrowing rate, the highest since late November 2023. This, coupled with a median housing price of $388,700 in February, is making homeownership seem like an even more distant dream for many.
But it’s not just potential homeowners who are feeling the squeeze. Renters are also facing challenges, with respondents expecting rental costs to increase by 9.7% over the next year.
Although there is some speculation about the Federal Reserve cutting interest rates later this year, survey respondents believe that mortgage rates will continue to rise. In fact, they anticipate borrowing costs to reach 8.7% in a year and 9.7% in three years, both record highs.
The housing market seems to be at a crossroads, with affordability becoming more and more out of reach for many Americans. Stay tuned to Extreme Investor Network for more insights and analysis on the ever-changing economic landscape.
