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Shifting Confidence in Homeownership: The Great Recession

  • Anat Bracha EMAIL logo and Julian C. Jamison EMAIL logo
Published/Copyright: October 25, 2012
The B.E. Journal of Macroeconomics
From the journal The B.E. Journal of Macroeconomics Volume 12 Issue 3

Abstract

We study the responses to several questions related to real estate that were added to the Michigan Survey of Consumers in July and August of 2011. Specifically, we asked about attitudes toward renting versus buying a home; about commuting; and about how much to spend on a mortgage. By matching the results to data about relative house price declines during the recent crisis (at the ZIP-code level), we can study the relationship between the housing crash and individual attitudes. We find that younger respondents are relatively less confident about homeownership after larger declines, while older respondents are relatively more confident. In both cases, this is observed only for those with personal experience of loss (via themselves or someone close) during the crash. We find no effect on attitudes toward commuting, and we find that people who live in the high-decline areas believe it is appropriate to spend more on a mortgage.

*Anat Bracha is an economist in the research department at the Federal Reserve Bank of Boston. Her e-mail address is anat.bracha@bos.frb.org. Julian C. Jamison is a senior economist at the Federal Reserve Bank of Boston. His e-mail address is julian.jamison@bos.frb.org. The authors thank Mary Burke, Stefan Nagel, Antonio Spilimbergo, and participants at the Federal Reserve Bank of Boston research seminar for helpful comments, and especially Chris Foote for advice and feedback. They also thank Michael Smith and Lynn Conell-Price for excellent research assistance throughout the project. They thank the University of Michigan, CoreLogic, and Loan Processing Services for data collection. All remaining errors are theirs alone. The views expressed in this paper are solely those of the authors and not those of the Federal Reserve System or the Federal Reserve Bank of Boston.
Published Online: 2012-10-25

© 2012 by Walter de Gruyter GmbH & Co.

Articles in the same Issue

  1. Introduction
  2. A Conference Overview
  3. Session 1
  4. The Statistical Behavior of GDP after Financial Crises and Severe Recessions
  5. First Discussant Comment on “The Statistical Behavior of GDP after Financial Crises and Severe Recessions”
  6. Second Discussant Comment on “The Statistical Behavior of GDP after Financial Crises and Severe Recessions”
  7. Session 2
  8. Shifting Confidence in Homeownership: The Great Recession
  9. First Discussant Comment on “Shifting Confidence in Homeownership: The Great Recession”
  10. Second Discussant Comment on “Shifting Confidence in Homeownership: The Great Recession”
  11. Session 3
  12. Potential Effects of the Great Recession on the U.S. Labor Market
  13. First Discussant Comment on “Potential Effects of the Great Recession on the U.S. Labor Market”
  14. Second Discussant Comment on “Potential Effects of the Great Recession on the U.S. Labor Market”
  15. Session 4
  16. The Future of U.S. Housing Finance Reform
  17. First Discussant Comment on “The Future of U.S. Housing Finance Reform”
  18. Second Discussant Comment on “The Future of U.S. Housing Finance Reform”
  19. Session 5
  20. Fiscal Policy as a Stabilization Tool
  21. First Discussant Comment on “Fiscal Policy as a Stabilization Tool”
  22. Second Discussant Comment on “Fiscal Policy as a Stabilization Tool”
  23. Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis? A Panel Discussion
  24. First Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  25. Second Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  26. Third Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  27. Speeches
  28. Global Financial Intermediaries: Lessons and Continuing Challenges
  29. The Effects of the Great Recession on Central Bank Doctrine and Practice
https://doi.org/10.1515/1935-1690.104

Articles in the same Issue

  1. Introduction
  2. A Conference Overview
  3. Session 1
  4. The Statistical Behavior of GDP after Financial Crises and Severe Recessions
  5. First Discussant Comment on “The Statistical Behavior of GDP after Financial Crises and Severe Recessions”
  6. Second Discussant Comment on “The Statistical Behavior of GDP after Financial Crises and Severe Recessions”
  7. Session 2
  8. Shifting Confidence in Homeownership: The Great Recession
  9. First Discussant Comment on “Shifting Confidence in Homeownership: The Great Recession”
  10. Second Discussant Comment on “Shifting Confidence in Homeownership: The Great Recession”
  11. Session 3
  12. Potential Effects of the Great Recession on the U.S. Labor Market
  13. First Discussant Comment on “Potential Effects of the Great Recession on the U.S. Labor Market”
  14. Second Discussant Comment on “Potential Effects of the Great Recession on the U.S. Labor Market”
  15. Session 4
  16. The Future of U.S. Housing Finance Reform
  17. First Discussant Comment on “The Future of U.S. Housing Finance Reform”
  18. Second Discussant Comment on “The Future of U.S. Housing Finance Reform”
  19. Session 5
  20. Fiscal Policy as a Stabilization Tool
  21. First Discussant Comment on “Fiscal Policy as a Stabilization Tool”
  22. Second Discussant Comment on “Fiscal Policy as a Stabilization Tool”
  23. Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis? A Panel Discussion
  24. First Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  25. Second Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  26. Third Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  27. Speeches
  28. Global Financial Intermediaries: Lessons and Continuing Challenges
  29. The Effects of the Great Recession on Central Bank Doctrine and Practice
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