The share of U.S. residents who view housing as a good investment is on the rise, having increased consistently over the past five years; and the view is largely unimpacted by recent natural disasters, according to the Survey of Consumer Expectations Housing Survey conducted by the Federal Reserve Bank of New York .
“The 2018 SCE Housing Survey results mainly paint a picture of steady and perhaps even growing household optimism about the housing market,” researchers wrote on Liberty Street Economics , the New York Fed’s blog.
The percentage of people who believe housing is a “somewhat good” or “very good” investment rose more than four percentage points over the past year. Nearly 65 percent of people now share this view, according to the Fed’s study  conducted in February. This compares to about 60 percent a year ago and 56 percent five years ago.
“Although the majority of households continue to view housing as a good financial investment, there are some persistent and large differences across regions in the pervasiveness of this view,” Fed researchers said.
They characterized those in the West as “systematically the most bullish” and those in the Northeast as the “least enthusiastic.”
Nearly 70 percent of households in the West viewed housing as a good investment, compared to about 56 percent in the Northeast. Southern households fell not far behind the West with about 69 percent of residents viewing housing as a good investment, and in the Midwest, about 61 percent of people viewed housing investments favorably.
The propensity to view housing as a good investment correlated with recent rates of home price growth, which were strongest in the West and weakest—although still relatively robust—in the Northeast, the study indicated.
However, “it is also possible that households’ enthusiasm about housing as an investment—despite the negative experience from the 2007-12 drop in house prices—helped sustain the house price recovery post-crisis,” the researchers noted.
In fact, residents in the West expected the most home price growth over the next year, predicting a 5.61 percent increase, compared to residents in the South who predicted a 5.12 percent rise in their region, residents in the Midwest who predicted a 3.72 percent increase in their region, and those in the Northeast who anticipated a 3.64 percent rise in their area.
In its most recent report, the Fed also zeroed in on areas impacted by recent natural disasters to determine whether those disasters impacted residents’ outlook on housing.
While the percentage of those who said they viewed housing as a “bad” or “very bad” investment demonstrated an uptick, so too did the percentage of those who viewed housing as either a “good” or “very good” investment.
“Overall the recent natural disasters do not seem to have dampened enthusiasm about housing, although views may have become more dispersed in response to this shock,” according to the Fed.
While the majority view housing as a good investment, the percentage who view it as an easily attainable investment declined over the year. About 17 percent of renters view obtaining a mortgage loan as “very easy” or “somewhat easy,” compared to about 20 percent a year ago, according to the Fed’s data.
Renters revealed a waning enthusiasm for homeownership with about 67 saying they preferred owning, compared to 72 percent a year ago and 74 percent two years ago. However, the preference for renting was primarily driven by those who were 50 years and older.