What are households’ expectations? Since 2019, the Deutsche Bundesbank has been investigating this question by surveying households in Germany on a regular basis (Bundesbank Online Panel Households).

The average inflation expectations of individuals in Germany for the next twelve months dropped sharply in April, falling from their March value of 6.2% to 5.7%. Inflation expectations are thus at a level similar to that last seen in March 2022. 16% of individuals still expected a significant rise in the inflation rate over the next twelve months in April, compared with 19% in March. Long-term inflation expectations, as measured by the expected average inflation for the next five years, fell slightly to 5.0% in April from 5.1% in March.

In April, individuals in Germany expected real estate prices in their region to increase by 5.7%. Individuals with household incomes of less than €2,500 expected a significantly stronger rise in real estate prices (8%) than those with monthly household incomes of €4,000 or more (4%). At 47% in April, the share of individuals expecting rising house prices in their region over the next twelve months was distinctly below the 50% mark again for the first time since November 2022.

In April, expectations regarding income were again somewhat more optimistic than in the previous month. Individuals anticipated an increase in their net household income of around €130 on average over the next twelve months (March: around €110). People with lower household incomes (less than €2,500) also express positive income expectations, although their expectations of around €20 were well below the average.

The Deutsche Bundesbank conducts regular surveys of households’ expectations for unemployment, economic growth, rent prices, real estate prices, and interest rates on savings and loans. These data are used to calculate index figures, from which corresponding trends can be easily derived.