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Consumers Anticipate Higher Wages, Slower Home Price Growth

forecastConsumer optimism on income growth remained fairly high in January, while expectations for home price gains in the next year fell slightly, according to survey results released Monday from the Federal Reserve Bank of New York.

Americans projected median earnings growth expectations of 2.5 percent over the next year, the New York Fed said, unchanged from December and "still at the high end of the range observed since the start of the series." Income growth expectations topped out at 2.7 percent in November.

Median household income growth expectations retreated slightly from December but still fared better than most of last year at 2.7 percent.

Meanwhile, the median home price change forecast one year out dropped to 3.4 percent from 3.6 percent at the end of 2014, putting it at the lowest point since the start of that series.

The combination of higher wages and slower home price growth could be a boon for the housing market, which has been held back in its recovery by stagnant wages fueling declines in affordability.

Consumers were also more positive on the labor market in January, lining up with the increase in last month's labor force participation rate. The mean perceived probability of losing one's job remained flat at 14.5 percent, while the mean perceived probability of finding a new job within three months increased to a high of 53.3 percent.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
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