The dream of owning a home is fading for renters across the nation, as soaring housing costs and skyrocketing interest rates form an impenetrable barrier, a recent New York Federal Reserve survey revealed.

According to the study released Monday, only a dismal 13.4% of renters still cling to hopes of achieving “residential mobility” — the belief that they’ll one day afford a place to buy.

This figure marks a record low, dropping from 15% in 2023 and a peak of 20.8% in 2014.

Soaring housing costs and skyrocketing interest rates have made homeownership impossible for a number of renters. –

The bleak outlook stems from a perfect storm of factors conspiring against renters’ chances of transitioning into homeownership.

A staggering 74.2% of renters now perceive obtaining a mortgage as either somewhat or very difficult, a sharp deterioration from previous years’ levels, the New York Fed noted.

Adding to the gloom, mortgage rates have remained stubbornly high, hitting an average 7.22% for a 30-year fixed-rate mortgage, the highest since late November 2023. This unwelcome reality continues to dent hopes for affordable homeownership.

Only 13.4% of renters believe they will actually be able to afford a home in the future. LIGHTFIELD STUDIOS –

Housing affordability itself hasn’t seen much improvement either, with the median price reaching $388,700 in February, according to the National Association of Realtors. The NAR’s housing affordability index reflects this struggle, with average monthly housing payments reaching $2,040.

Survey respondents foresee no relief in sight.

They anticipate housing prices to surge by 5.1% over the next year, nearly double the rate expected in February 2023. And despite murmurs of potential interest rate cuts by the Federal Reserve, renters fear mortgage rates will only climb higher, hitting record highs of 8.7% in a year and 9.7% in three years, according to the survey.

Some 74% of renters view obtaining a mortgage as either somewhat or very difficult, according to a survey by the New York Fed. Gorodenkoff –

But the woes don’t end there.

Renters face a harsh rental market as well, with costs projected to spike by 9.7% over the next year — a grim outlook that marks the second-highest increase in series history.

These findings come on the heels of the Federal Open Market Committee’s decision to maintain benchmark interest rates, citing “a lack of further progress” in curbing inflation.

The National Association of Realtors anticipates housing prices will continue to surge. They predict it will be by 5.1% over the next year. ake1150 –

While futures market pricing hints at potential rate cuts by September, renters remain skeptical about any imminent relief.

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