More consumers expect home prices to change, according to the latest Survey of Consumer Expectations released by the Federal Reserve Bank of New York (New York Fed). The latest survey found that while short- and medium-term inflation expectations among consumers remained unchanged, they increased 0.2 percentage points in June to 3.9 percent when it came to changes in home prices.
This is "well above the 12-month trailing average of 3.3 percent," the New York Fed said. However, the survey found that the uncertainty around home prices that had reached a 12-month high in May dipped slightly in June.
The New York Fed said that median inflation expectations at both the one-year and three-year horizons remained unchanged for the third consecutive month at 3 percent. While the uncertainty over it declined at the one-year level, it increased slightly at the three-year horizon.
Though households reported a growth in household income to 2.7 percent, a 0.1 percentage point rise over May, the perceived change in credit availability compared to a year ago worsened slightly in June. According to the survey, the proportion of respondents reporting easier credit access declined to 23.6 percent in June from 23.9 percent in May. However, expectations for credit availability in the year ahead improved slightly from 20.7 percent in May to 21.7 percent in June.
After falling in May, median household spending growth expectation increased in June to 3.4 percent. "This reading had increased for three consecutive months at the beginning of the year before dipping in May," the survey said.
Despite the year-ahead expectations of households' financial situations improved in June—11.8 percent respondents expected to be worse off financially, compared with 13.7 percent in May—more consumers said they were afraid of missing a minimum debt payment. The survey revealed that the average perceived probability of missing a minimum debt payment over the next three months increased for the third month in a row, to 12.4 percent from 11.7 percent in May.