According to the latest Survey of Consumer Expectations on their Financial Future report done by the New York Federal Bank, 19% of Americans anticipate moving during this next year. This is the highest May “move rate” reading in two years though the “move rate” March 2019 was the highest ever at 21.7%.
It’s worth remembering that during May of this year, mortgage interest rates had their biggest drop in a decade as measured by Freddie Mac. Still, mortgage interest rates have continued to decline to, according to Bankrate, 4.04% on a standard 30-year-fixed and 3.38% on a standard 15-year fixed mortgage.
Despite continued declines in mortgage interest rates, the New York Federal Bank found in its research for this report that some Americans “…are having growing uncertainty about the economy.” And this uncertainty about the economy is causing them to not bid on homes.
Robert Dietz, chief economist with the National Association of Home Builders (NAHB), said, “We expected more people to be ready to get into the market because of low mortgage rates and rising wages but some people have remained on the sidelines which is causing some prospective home buyers to be reluctant.”
In this same report on Consumer Expectations done by the New York Federal Bank, survey participants also indicated they had lower expectations for their own future income growth due to economic uncertainties stemming from tensions between China and the US. Survey participants indicated they anticipated a 2.8% gain for their future income growth.
Mike Fratantoni, senior vice president and chief economist with the Mortgage Bankers’ Association (MBA), reinforced the views of survey participants by saying, “Potential homebuyers may be more cautious given the heightened economic uncertainty present in today’s world.”
Survey participants also stated their anticipation of having to pay higher taxes at their current income levels due to the 2017 Tax Bill favoring corporations and the uber-wealthy. “Someone’s got to pay for the shortfall, right?” was a common sentiment expressed by survey participants. And their median expectation rose to having to pay +3% more taxes at their current income level in the year-ahead.