What Have They Been Thinking? Home Buyer Behavior in Hot and Cold Markets
AbstractQuestionnaire surveys we have undertaken in 1988 and annually 2003–2012 of recent homebuyers in each of four U.S. cities shed light on their expectations and reasons for buying and selling during the recent housing boom and subsequent collapse, and on the reasons for the housing crisis that initiated the current financial malaise. We find that homebuyers were generally well informed, and that their short-run expectations if anything underreacted to the year-to-year change in actual home prices. More of the root causes of the bubble can be seen in their long-term, ten-year, home price expectations, which reached abnormal levels relative to the mortgage rate at the peak of the boom and declined sharply since. The downward turning point around 2005 of the long boom that preceded the crisis was associated with changing public understanding of speculative bubbles.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18400.
Date of creation: Sep 2012
Date of revision:
Note: AP EFG
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-30 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brueckner, Jan K., 1981. "A dynamic model of housing production," Journal of Urban Economics, Elsevier, vol. 10(1), pages 1-14, July.
- Jonathan McCarthy & Richard W. Peach, 2004. "Are home prices the next "bubble"?," Economic Policy Review, Federal Reserve Bank of New York, Federal Reserve Bank of New York, issue Dec, pages 1-17.
- Giovanni di Iasio & Mario Quagliariello, 2013.
"Incentives through the cycle: microfounded macroprudential regulation,"
Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area
894, Bank of Italy, Economic Research and International Relations Area.
- di Iasio, Giovanni & Quagliariello, Mario, 2011. "Incentives through the cycle: microfounded macroprudential regulation," MPRA Paper 28179, University Library of Munich, Germany.
- di Iasio, Giovanni & Quagliariello, Mario, 2011. "Incentives through the cycle: microfounded macroprudential regulation," MPRA Paper 30769, University Library of Munich, Germany.
- Paolo Gelain & Kevin J. Lansing, 2013.
"House prices, expectations, and time-varying fundamentals,"
Working Paper Series, Federal Reserve Bank of San Francisco
2013-03, Federal Reserve Bank of San Francisco.
- Paolo Gelain & Kevin J. Lansing, 2013. "House prices, expectations, and time-varying fundamentals," Working Paper, Norges Bank 2013/05, Norges Bank.
- Aizenman, Joshua & Jinjarak, Yothin, 2013. "Real Estate Valuation, Current Account, and Credit Growth Patterns Before and After the 2008–2009 Crisis," ADBI Working Papers, Asian Development Bank Institute 429, Asian Development Bank Institute.
- John C. Williams, 2013.
"Bubbles tomorrow and bubbles yesterday, but never bubbles today?,"
Speech, Federal Reserve Bank of San Francisco
122, Federal Reserve Bank of San Francisco.
- John C. Williams, 2013. "Bubbles tomorrow and bubbles yesterday, but never bubbles today?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco, issue sept23.
- Pei Kuang, 2014. "A Model of Housing and Credit Cycles with Imperfect Market Knowledge," Discussion Papers, Department of Economics, University of Birmingham 14-07, Department of Economics, University of Birmingham.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.