Do consumers’ home buying attitudes explain the behaviour of US home sales?

ABSTRACT

This article asks whether consumers’ home buying attitudes explain the behaviour of home sales by focusing on two tranquil and two uncertain periods within 1978–2015. We utilize monthly data to formulate and estimate four augmented autoregressive models with the results indicating that improvements (deteriorations) in consumers’ home buying attitudes lead to higher (lower) home sales. This conclusion remains unchanged when controlling for economic and financial indicators often cited as determinants of home sales. Overall, our article has key implications for future studies aiming to forecast home sales using attitudinal measures.

KEYWORDS:

• Housing
• home buying attitudes
• business cycles
• surveys of consumers

JEL CLASSIFICATION:

• R21
• E32

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ The HB_t data are all available on the Surveys of Consumers website.

² The data on these variables are available on the Federal Reserve Bank of St. Louis website.

³ This conclusion remains unchanged when including the contemporaneous or additional lags of the control variables in Equation 1.