Households have a fairly bleak view of prospects for home prices in the immediate future, but a slightly more optimistic belief that they will come down over the next five years, according to the Federal Reserve Bank of New York 2024 Survey of Consumer Expectations for housing.

Average one-year ahead expectations for home prices have now reached their second-highest reading in the survey's history. In 2024, respondents expect a 5.1% hike in home prices, compared to a rise of 2.6% predicted in 2023. Belief that prices will rise this year was widespread across demographic groups, but particularly true in the South. A price drop of 0.1% over the next five years to 2.7% was also expected.

Households also expect rents to go up 1.5 percentage points to 9.7% in the coming year, but then flatten over the next five years. "Renters' views on the ease of obtaining a mortgage deteriorated substantially, with 74.2% stating that obtaining a mortgage is somewhat or very difficult. In fact, renters' self-assessed probability of ever owning a home decreased to a new series low," the survey showed.