Survey of Consumer Expectations shows that inflation expectations continued to decline.

Inflation is expected to continue “to decline across all horizons” over the next year while home price growth, too, is projected to decline “sharply” to the lowest level since July 2020, according to a recent Survey of Consumer Expectations (SCE) released by the Federal Reserve Bank of New York. The median one-year inflation expectation, the August SCE report shows, fell to 5.7%, down from 6.2% in July. Median home-price growth expectations fell by 1.4 percentage points in August compared with July, to 2.1%, which is the lowest SCE reading since July 2020. “The decline was broad-based across demographic groups and geographic regions,” the August SCE report states. “Home-price expectations have now fallen by nearly two-thirds since the April 2022 reading of 6.0%.” The SCE report is based on a nationally representative, internet-based survey of a rotating panel of some 1,300 heads of household. The report’s findings for August echo analysis of home-price data released in July by Black Knight Data & Analytics. “Annual home-price growth shifted from deceleration to decline in July as the median home price fell 0.77% from June – the largest single-month decline since January 2011…,” Black Knight reported in its July Mortgage Monitor report. “Escalating declines in June and July have total tappable equity down 5% over the past two months, suggesting a sizeable reduction is likely in Q3, which would mark the first quarterly decline in three years.”

Source: HousingWire