Press Release

Short-Term Home Price Expectations Drop Sharply; Rental Price Growth Expectations Remain Elevated

March 28, 2023

NEW YORK—The Federal Reserve Bank of New York today released results from its 2023 SCE Housing Survey, which is part of the broader Survey of Consumer Expectations (SCE) and provides information on consumers' housing-related experiences and expectations. The results show that households expect home prices to increase over the coming twelve months at the slowest pace since the survey began in 2014. In contrast, home price expectations over the next five years increased relative to last year's survey. Expectations about the one-year-ahead change in the cost of rent were considerably higher than home price expectations but declined relative to last year's series high. Homeowners' expectations about the likelihood of refinancing their mortgage over the next 12 months fell sharply to a new series low. The probability of buying a home conditional on a move over the next three years rose overall, driven by higher expectations among current owners. A large majority of households continue to view housing as a good financial investment, although the share characterizing housing as a "somewhat good" or "very good" investment declined slightly from February 2022.

The SCE Housing Survey has been fielded annually since 2014 and more detailed results are available in an interactive web feature, which presents trends of key variables by various demographics over time. In addition, an accompanying background report provides additional summary statistics and charts for a number of the Survey's questions.

Key findings from the 2023 Survey, which was fielded in February 2023, are:

Home Prices/Rents

  • Average one-year-ahead home price growth expectations fell sharply to 2.6% from 7.0% in February 2022. This represents the lowest reading since the series' inception in 2014. This decline is broadly consistent with data from the core SCE survey, which shows that home price growth expectations declined sharply between May 2022 and November 2022, before rebounding slightly in subsequent months. The previous record low for one-year-ahead home price growth expectations was 3.3%, recorded in 2016.
  • Households' home price growth expectations for the five-year horizon were up from last year. Households expect prices to rise by 2.8% per year on average, for the next five years, slightly above their expectation for the next year.
  • While rent change expectations moderated, they remain high by historical standards and in comparison to home price growth expectations. On average, households expect the cost of rent to increase 8.2% over the next 12 months, compared to 11.5% in February 2022. Over the next five years, households expect average annual rent increases of 5.0%, down slightly from 5.2% a year ago. Households expect rent increases to substantially outpace home price increases over the next five years.

Housing Outlook

  • While attitudes toward housing as a financial investment remained strongly positive, they weakened slightly from the previous year, as 68.4% of all respondents characterized buying property in their zip code as a "very good" or "somewhat good" investment. This is slightly below the readings of the last three years, but still above the levels of optimism that prevailed in the pre-pandemic period. The share of respondents reporting that housing is a "bad" or "somewhat bad" investment fell to 7.9% from 9.9% a year ago.
  • Average expectations of residential mobility (the percent change of moving to a different primary residence) fell to new series lows at both the one-year (15.0%) and three-year (24.9%) horizons, continuing a declining mobility trend since 2014.
  • The average expected probability of buying a home if the household were to move within the next three years rose slightly to 62.2%, from 60.7% in 2022. Despite this increase, the probability of buying conditional on a move remains well below its 2021 peak of 68.5%.

Mortgage Rates

  • On average, households perceive that national mortgage rates are currently higher than pre-pandemic levels and expect them to rise further in the future. Households now expect mortgage rates to rise to 8.4% a year from now and 8.8% in three years' time.
  • Still, households expect that there is a 49.1% chance that mortgage rates will fall over the next 12 months, rebounding from last year's series low of 41.8%.


  • Homeowners reported another large decline in their expected probability of refinancing their mortgages in the next year; the average probability declined from 7.7% in 2022 to 4.1%, a series low, this year.

Renters and other non-owners

  • Renters reported a small increase in their probability of owning a home in the future, from 43.3% in 2022 to 44.4% this year. Nonetheless, this figure remains well below the 2015-2021 period, when it was generally over 50%.

About the SCE Housing Survey

The SCE Housing Survey, fielded annually as part of the Survey of Consumer Expectations (SCE), provides rich and high-quality information on consumers' experiences, behaviors, and expectations related to housing. The survey collects data on households' home price growth perceptions and expectations; intentions regarding moving and buying a home in the future; and perceptions of credit conditions, as well as climate risk. For homeowners, the survey collects detailed information on their mortgage debt, past actions and experiences such as foreclosure or refinancing, and expectations regarding future actions, such as taking out new debt or investing in the home. For renters, the survey elicits preferences for owning versus renting, and perceptions regarding the ease of obtaining mortgage credit, and expectations of evictions, among other things.

More information about the SCE survey goals, design, and content can be found here.

Ellen Simon
(347) 978-3036
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