Tenants are increasingly pessimistic that they will own a home at any time as prices continue to rise

On average, only 43.3% of renters expect to own a home at some point in the future, down sharply from 51.6% in 2021, according to the Federal Reserve Bank of New York. survey Released on Monday.

This is the lowest level since the Federal Reserve Bank of New York began asking the question in 2015.

Higher prices seem to be the driving factor: Twenty-two percent of households in the survey reported that they had planned to buy a home but now view rent as a better financial decision. Most respondents prefer to either rent (36%) or say they wait for prices to drop before buying (42%).

The results come after housing prices Last year, it increased by the largest percentage recorded, surpassing even the explosive growth of the housing bubble in the early 2000s. Some people who had hoped to buy were pushed out of the market, forcing them to rent instead. This, in turn, helped raise rental rates.

The shift in sentiment in the New York Fed survey was driven by families with less college education and lower incomes.

About one in three (34%) of those surveyed who earn less than $60,000 think they will eventually own a home. This is down from 46% in 2020.

Similarly, 34% of those with a lower bachelor’s degree expect to own a home, down from 46% two years ago.

Meanwhile, families are preparing for higher rental prices.

Households expect rents to rise 11.5% over the next 12 months, nearly double the 6.6% pace projected in February 2021. Over the next five years, households expect annual rent to rise 5.2%, compared to 4.4% a year ago.

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“All these numbers suggest a rise in rents in the near future, followed by more moderate growth in subsequent years,” the Federal Reserve Bank of New York said in the report.

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