Pessimism among renters about the ability to ever own a home is worsening, with the expectations of someday owning a home falling to a new all-time low, a survey released Monday by the Federal Reserve Bank of New York showed.
The average probability of buying a home, according to renters in the New York Fed’s Survey of Consumer Expectations, fell to 40.1 percent. That’s down from 44.4 percent a year ago and the lowest in records stretching back a decade.
President Joe Biden has overseen a historic drop in homeownership expectations among renters. When he took office, the average probability was 51.6 percent.
The decline has been particularly pronounced among renters under 50. Three years ago, renters under 50 on average assigned a 67.2 percent chance that they would someday by a house. Today it is just 48.7 percent. This is the first time that the perceived chances of owning a home for younger Americans fell below 50 percent.
Although Biden frequently claims his policies will grow the economy “from the bottom up and the middle out,” housing expectations show Americans with lower incomes have become much more pessimistic about homeownership. In February 2021, shortly after Biden took office, Americans with incomes lower than $60,000 per year assessed an average chance of buying a home at 41.3 percent. This year, the odds have fallen to 31.3 percent, also a record low.
For American renters with incomes above $60, the share saying they expect to buy a house someday declined from 69.8 percent when Biden took office to 61.5 percent, also an all-time low.
By region, the declines in the Northeast and Midwest stand out. Expectations fell from 43.4 percent in 2021 to just 25.8 percent this year. The Midwest has seen homebuying expectations fall from 61 percent—the highest in the country at the time—to 36.7 percent, second only to the Northeast in terms of pessimism.
The survey also revealed that expectations for inflation in home prices over the past year have soared. A year ago, the average one-year-ahead home price growth expectation was 2.6 percent. Now it is 5.1 percent, the second highest on record.