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Higher Home Prices Continue, Consumer Survey Determines

Keith Griffin
Apr 11, 2022
NY Federal Reserve Bank headquarters
New York Federal Reserve Bank
NY Federal Reserve

NY Fed finds pessimism abounds on inflation, jobs and credit availability

Consumers expect higher home prices to continue amidst continued higher inflation and worsening personal income. That’s among the findings of the Federal Reserve Bank of New York’s Center for Microeconomic Data March 2022 Survey of Consumer Expectations released this morning.

Home price growth expectations ticked up, the survey found, while year-ahead spending growth expectations increased to a new series high. Labor market and income growth expectations receded somewhat, and respondents turned less optimistic about their year-ahead household’s financial situation.

The median expected change in home prices one year from now increased to 6% from 5.7%. The measure, which has been elevated for the past year, remains well above its pre-pandemic reading of 3% in February 2020. 

Credit availability continues to be a major concern and source of pessimism. Perceptions of credit access compared to a year ago deteriorated in March, with more respondents finding it harder to obtain credit now than a year ago. Expectations about future credit availability deteriorated as well, with more respondents expecting that it will be harder to obtain credit in the year ahead.

Median one-year-ahead inflation expectations increased to a new series high of 6.6% from 6% in February, while median three-year ahead inflation expectations decreased to 3.7% from 3.8%.

Perceptions about households’ current financial situations compared to a year ago deteriorated in March, with more respondents reporting being financially worse off than they were a year ago. Respondents were also more pessimistic about their household’s financial situation in the year ahead, with fewer respondents expecting their financial situation to improve a year from now.

An interesting statistic concerns both voluntary and involuntary job loss. The mean perceived probability of losing one’s job in the next 12 months rose to 11.1% from 10.8%, but remains well below its pre-pandemic reading of 13.8% in February 2020. The mean probability of leaving one’s job voluntarily in the next 12 months also increased to 19.2% from 19%.

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