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NY Fed Weighs in on Economy and Housing

On Monday, the Federal Reserve Bank of New York’s Center for Microeconomic Data released the August 2018 Survey of Consumer Expectations. According to the Survey, home price growth expectations fell for the second month in a row, while income and spending growth expectations remained relatively stable, and household financial situations expectations improved.

The survey found that consumers believe home prices to increase a median of 3.6 percent as of August, compared to 3.7 percent in July and 3.9 percent in June. However, this is still higher than the 3.4 percent 12 month average. By age, the oldest consumers expect the biggest changes in home prices. Consumers over 60 expect home prices to increase by 4.22 percent, compared to 3.17 percent for consumers aged 40 to 60, and 3.26 percent for those under 40.

Still, according to the Q2 Household and Debt and Credit Report from the New York Federal Reserve, housing debt is still on the rise. Housing debt, which consistently composes the largest share of consumer debt, made up $9.43 trillion of consumer debt in the second quarter, and mortgage balances rose by $60 billion over the second quarter. But with household financial situations expectations improved, there may be more opportunity to tackle that debt.

According to the Fed’s survey, mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—jumped from 34.2 percent in July to 35.3 percent in August, reaching its highest level since October 2017. However, this doesn't mean everyone thinks they’re going to lose their jobs. The survey found that mean perceived probability of losing one’s job in the next 12 months and the mean probability of leaving one’s job voluntarily in the next 12 months declined, from 14.0 percent to 13.8 percent and from 23.2 percent to 20.6 percent, respectively.

Speaking of jobs, the survey also found that respondents are slightly more pessimistic about the chances of finding a job if they lose theirs. According to the Fed, the mean perceived probability of finding a job declined to 57.8 percent in August, falling below its 12-month trailing average of 59.0 percent, but remaining within its tight 57.1 to 60.1 range observed since July of 2017.

Find the full report form the New York Fed here.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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