Who understands the US housing market?

ABSTRACT

We perform econometrics analyses on a database retrieved from the Federal Reserve Bank of New York, named the “Survey of Consumers’ Expectations” (SCE), for the period 2013–19, by which 12,857 respondents gave their impressions of the US real estate market. We add to the common list of drivers of market predictions an analysis of the extent to which the respondents misjudged the housing market for the following year. We include state-level macro-economic data, such as state income and growth, to reinforce the understanding of this phenomenon. Heterogeneous profiles emerge based on market information available to consumers.

KEYWORDS:

• Real estate market
• consumers’ expectations
• heterogeneity
• forecasting error

JEL CLASSIFICATION:

• D12
• D84
• R20
• R31

Disclosure statement

No potential conflict of interest was reported by the author(s).