People whose friends have positive experiences in the housing market are more likely to buy themselves, according to a new study.
They’re also more likely to buy a larger home, more likely to pay more for a home, and more likely to make a bigger down payment when their friends are making successful investments, reports Kriston Capps, a writer at CItyLab.
He examines the new paper by the National Bureau of Economic Research. Capps writes:
Now, it would only make sense that a person would take her neighbor’s experience in the housing market as instructive advice. A person who talks to her friends about their experiences with investments is doing crucial research. But this research seeks to determine “the plausibly-exogenous variation in the recent house price experiences of an individual’s geographically-distant friends as shifters of her local housing market expectations.”
Read the CityLab article for more information.