Are homeowners in denial about their house values? comparing owner perceptions with transaction-based indexes
AbstractThe boom and bust of the housing market has been a prominent feature of the household financial landscape in recent years. The exact magnitude of the house price swings depends on whether you ask homeowners how much their houses are worth at two points in time or use the change in a transaction-based house price index (HPI). During the boom, owner-reported values rose much more rapidly than the HPI, and after the bust, owner-reported values fell slightly less than the HPI. Individual homeowner "errors" are estimated to explain about one-third of the different in aggregate changes in the housing stock as measured by the Survey of Consumer Finances and CoreLogic national HPI. In a panel of homeowners surveyed during the housing downturn, owner-reported changes in value do not systematically diverge from local house price index changes.
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Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2013-79.
Date of creation: 2013
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-06 (All new papers)
- NEP-MAC-2013-12-06 (Macroeconomics)
- NEP-URE-2013-12-06 (Urban & Real Estate Economics)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Are homeowners delusional about the value of their home?
by Economic Logician in Economic Logic, Too on 2014-01-07 15:45:00
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