Respondents to an annual survey by the Federal Reserve Bank of New York expect less robust home price growth in the year ahead, which in turn would mean a slower buildup of equity. However, the majority of respondents continued to view homeownership as a sound investment.

In the 2019 SCE Housing Survey, part of the broader Survey of Consumer Expectations, the average respondent said they expect home prices to grow by 3.6 percent over the next year – down 1 percentage point from the 2018 survey. The average respondent expected price growth of 2 percent per year over the next five years, also down about 1 percentage point.

Sixty-five percent considered buying a home in their ZIP code to be a good investment, unchanged from the previous year. The share considering it to be a bad investment fell from 10.6 percent in 2018 to 9 percent in the current survey. Respondents under the age of 50 were slightly less likely to consider homeownership a good investment, and slightly more likely to worry that home prices five years from now might be lower than current prices.

Just over one-third of respondents—34.7 percent—said they expect to invest at least $5,000 in their home over the next year. Forty-eight percent said they will likely make this level of investment over the next five years.

The share of respondents expecting to refinance their mortgage within the next year has fallen steadily in recent years. Eight percent said they think they will refinance, down from 8.8 percent in the 2018 survey and 11.9 percent in the 2015 survey.

Most respondents expect to stay at their current address, with 54.2 percent saying they will likely be there for more than 10 years. Another 19.7 percent expected that their tenure would last another six to 10 years, while 18.7 percent said they would stay there another two to five years. Just 7.4 percent said they are likely to leave their current residence within two years.

A total of 28.6 percent said it is probable that they will move within the next three years. A total of 17.8 percent said they think they will move within a year. Sixty-four percent said they would likely buy a home if they moved in the next three years, unchanged from the previous year.

The average respondent expected rents to increase by 7.3 percent over the next year and 4.5 percent per year over the next five years. These expectations were on par with those in the 2018 survey.

Among renters, 57.9 percent said they thought it would be difficult for them to qualify for a mortgage. However, this share was down 10 percentage points from the previous year.

About seven in 10 renters in the survey—71.5 percent—said they would prefer to own a home rather than rent. This share was on par with 2016 and 2017 levels, returning from a dip to 67.3 percent in 2018, and primarily driven by renters aged 50 and older.

A total of 52.4 percent of renters said it was probable that they would own their primary residence sometime in the future. This was slightly below 2016 and 2017 levels, but up from 49.5 percent in the previous year.