Consumers Dial Back Home Price Expectations

A new survey put out by the Federal Reserve Bank of New York found that inflation expectations rose slightly in March, while home price change expectations declined slightly.

The New York Fed’s findings from the Survey of Consumer Expectations (SCE) commented that consumer expectations for inflation rose both at the one-year and three-year horizon by 3.2 percent and 3.4 percent, respectively.

The increase was driven by respondents with lower education, according to the New York Fed.

Median earnings growth expectations rose slightly to 2.4 percent, the highest level since the survey began in June 2013. The average perceived change of finding a job in three months, if the respondent were to lose their job today, increased slightly to 49 percent.

The survey found, "The mean perceived chance of being laid off declined slightly, driven by a decline in expected layoff risk reported by college graduates; however, the mean likelihood of voluntary quits also fell slightly."

Respondents expect household income growth to remain stable, except for younger household heads. Survey respondents who believe income growth will rise for those 40 or under jumped 4.6 percent.

Home price change expectations declined slightly for the second month in a row, matching the lowest level seen since October 2013. The Fed found that the pattern did not hold in the West, where home prices are expected to continue at an even stronger pace.

Perceptions of credit availability improved slightly. Fewer people reported finding it harder to obtain credit today compared to last year. Debt delinquency expectations also fell back slightly in March, the Fed reported.