Renters are slightly more optimistic than owners regarding price increases, both in the coming year and thereafter, according to the new consumer survey conducted by the New York Federal Reserve Bank in February and released last week.  In fact, renters respond to the annual survey were more bullish for the second year in a row.

Both renters and owners expect prices to increase less than they have to date in most national market reports and to slow considerately to about half the current rate of appreciation in years to come.

All survey respondents were asked for the current value of a typical home in their zip code, and what they expected the value of that home to be in one year point higher than the average rate in the 2014 survey and remarkably close and in five years.

On average, both renters and owners expected home prices to increase by 4.4 percent over the next twelve months—a rate 0.1 percentage point higher than the average rate in the 2014 survey.  Today CoreLogic reported year over year prices increased 6.8 percent in April 2015.

With regard to longer-term expectations, the average (median) expected annualized change in home prices over the next five years was only 2.9 percent (2.4 percent median). These figures were slightly lower than the corresponding figures in the 2014.

Thus, overall, respondents expected home price growth to continue, but at a much slower pace at a horizon beyond one year.

Renters and owners differed on their expectations for price growth.  The average home price growth expectations of current renters were about a percentage point higher than those of owners at both horizons. The average year-ahead expectation for renters was 5.2 percent, significantly higher than the average of 4.1 percent for owners. Last year’s survey reported a similar gap.

Since last year, the perceived likelihood of a severe decline of among owners for a severe decline after a year changed little but for renters, the median short-term home price expectations declined from 3.7 percent to 3.1 percent.

Attitudes toward housing as a financial investment were decidedly positive. More than 60 percent of both renters and owners think that buying property in their zip code is a good investment, while only about 10 percent think it is a bad investment. Owners seem to have become more bullish since last year’s survey. The proportion of owners who think that housing is a good investment increased from 58.5 percent in the 2014 survey to 63.2 percent, while the proportion thinking that housing is a bad investment declined from 11.9 percent.