Accessible Requires Authentication Published by De Gruyter October 25, 2012

Shifting Confidence in Homeownership: The Great Recession

Anat Bracha and Julian C. Jamison


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 Julian C. Jamison is a senior economist at the Federal Reserve Bank of Boston. His e-mail address is 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

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