Press Release

Home Price Expectations Trend Higher While Short-Term Inflation Expectations Continue to Moderate

July 10, 2023

NEW YORK—The Federal Reserve Bank of New York's Center for Microeconomic Data today released the June 2023 Survey of Consumer Expectations, which shows that inflation expectations continued to fall at the short-term horizon, remained unchanged at the medium-term horizon, and increased somewhat at the longer-term horizon. Home price growth expectations rose again to their highest level in almost a year. Households' perceptions and expectations for credit conditions and for their own financial situations both improved slightly.

The main findings from the June 2023 Survey are:


  • Median inflation expectations declined for the third consecutive month at the one-year-ahead horizon from 4.1% in May to 3.8% in June, the lowest reading since April 2021. The measure has now fallen by 3 percentage points from its series high in June 2022. The decline is broad based across demographic groups. In contrast, median inflation expectations remained unchanged at 3.0% at the three-year-ahead horizon and increased by 0.3 percentage point to 3.0% at the five-year-ahead horizon, the highest reading since March 2022. The survey's measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at the one- and three-year-ahead horizons and increased at the five-year-ahead horizon.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined across all three horizons.
  • Median home price growth expectations increased for the fifth consecutive month from 2.6% in May to 2.9% in June, the highest reading since July 2022. The increase was driven by respondents with a college degree and those who live in the South and West Census regions.
  • Median year-ahead expected price changes declined by 0.4 percentage point for gas (to 4.7%) and 0.1 percentage point for food (to 5.3%). In contrast, median year-ahead expected price changes increased by 1.2 percentage points for the cost of college education (to 8.3%), 0.1 percentage point for medical care (to 9.3%), and 0.3 percentage point for rent (to 9.4%).

Labor Market

  • Median one-year-ahead expected earnings growth increased by 0.2 percentage point to 3.0%. The series has been moving within a narrow range of 2.8% to 3.0% since September 2021.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 2.3 percentage points to 37.7%, the lowest reading since April 2022.
  • The mean perceived probability of losing one's job in the next 12 months increased by 2.0 percentage points to 12.9%, the highest reading since November 2021. The mean probability of leaving one's job voluntarily in the next 12 months decreased, by 0.2 percentage point, to 18.9%. The increase in the mean likelihood of a layoff was driven by respondents aged 40 or higher.
  • The mean perceived probability of finding a job (if one's current job was lost) decreased from 56.4% in May to 55.3% in June.

Household Finance

  • Median expected growth in household income decreased by 0.1 percentage point to 3.2% , remaining below the series 12-month trailing average of 3.6%.  
  • Median household spending growth expectations declined from 5.6% in May to 5.2% in June, well below its 12-month trailing average of 6.4%, and the lowest reading since September 2021.     
  • Perceptions of credit access compared to a year ago improved somewhat in June, with a slightly higher share of households reporting that it is easier to obtain credit now than a year ago. Similarly, respondents' views about future credit availability improved slightly. The share of respondents expecting tighter credit conditions a year from now decreased, while the share expecting looser credit conditions rose.
  • The average perceived probability of missing a minimum debt payment over the next three months increased by 0.7 percentage point to 12.0% in June, the highest reading since January 2023. The increase was driven by respondents with no more than a high school education.
  • The median expectation regarding a year-ahead change in taxes (at current income level) increased by 0.2 percentage point to 4.3%.
  • Median year-ahead expected growth in government debt increased from 9.7% in May to 10.0% in June.
  • The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 0.5 percentage point to 29.8%, the lowest reading since December 2021.
  • Perceptions about households' current financial situations improved in June with more respondents reporting being better off than a year ago and fewer respondents reporting being worse off. Similarly, year-ahead expectations improved with fewer respondents expecting to be worse off a year from now and more respondents expecting to be better off.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.0 percentage point to 35.3%.

About the Survey of Consumer Expectations (SCE)

The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave. It also provides insight into Americans' views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty regarding consumers' outlooks. Expectations are also available by age, geography, income, education, and numeracy.

The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to 12 months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, this panel allows us to observe the changes in expectations and behavior of the same individuals over time. For further information on the SCE, please refer to an overview of the survey methodology here, the interactive chart guide, and the survey questionnaire.

Betsy Bourassa
(212) 720-6885
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