Americans’ expectations for home-price changes fell to a record low in August, according to results from the Federal Reserve Bank of New York’s latest monthly survey of U.S. households.
The median estimate of one-year price changes was 4%, dropping from 4.64% in July, according to the report. August was the lowest reading since the survey began in 2013. A year earlier, the median expectation was 4.43%.
The share of people who told the Fed they expect to move fell to an almost two-year low.
Consumers are becoming more pessimistic about the growth of home prices, just as they are about other parts of the economy, the Fed report said.
“Expectations about employment, growth in earnings, spending, income and household financial situation were generally less optimistic,” the New York Fed said.
Last month, Fed Chairman Jerome Powell warned the Fed’s array of tools may not be enough to counter President Donald Trump’s trade war with China.
“While monetary policy is a powerful tool that works to support consumer spending, business investment and public confidence, it cannot provide a settled rulebook for international trade,” Powell said at the Kansas City Fed’s annual symposium at Jackson Hole, Wyoming.
The Fed’s report on consumer expectations also showed a downturn in the outlook for income growth and increased worry about a rise in unemployment a year from now.
Survey respondents also put the probability that the stock market would be higher a year from now at 38% on average, the lowest since October 2016.
The Fed’s survey comes a week before the Federal Open Market Committee meeting where policymakers, led by Powell, will discuss interest-rate policy. There is broad expectation the FOMC will lower its overnight target rate for the second time since the financial crisis, on the heels of a 0.25% cut at its July meeting.