The Great Recession and Attitudes Toward Homebuying
48 Pages Posted: 22 Dec 2011
Date Written: December 14, 2011
The report finds that almost 80 percent of American households believe that now is a good time to buy a home, despite high unemployment, slow economic growth and problems plaguing the economy. This positive attitude is attributable to low house prices and low mortgage interest rates. The data shows that the pattern of home-buying sentiment during the current recession looks similar to that of past recessions and is consistent with the long-run average level.
What is different about the current recession is that positive home-selling sentiment is at a historic low, dominated by deeply negative sentiment, which is strongly related to difficulty in finding buyers at desired sales prices, as well as the large overhang of mortgages past due or in foreclosure.
The study utilizes 30 years of data from the University of Michigan's "Survey of Consumer Attitudes" to examine public sentiment regarding home-ownership before, during and after the financial crisis. In particular, it measures the extent to which the most recent recession has changed consumer sentiment toward home buying and selling.
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