IDEAS home Printed from https://ideas.repec.org/a/pal/buseco/v50y2015i4p178-190.html
   My bibliography  Save this article

The Home Purchase Sentiment Index: A New Housing Indicator

Author

Listed:
  • James A Wilcox

Abstract

We built a home purchase sentiment index (HPSI) with consumers’ responses to questions about home buying and selling conditions, income gains and job concerns, and house price and mortgage rate expectations. The HPSI can help forecast mortgage originations and house prices, sales, and starts. Forecasting horse races during 2012–14 show the HPSI handily outperformed other sentiment indices. We show differences in the HPSI by income and by age groups. We also suggest other aspects of housing where survey-based indicators may help, such as demand by millennials or seniors, home owners’ moving, renters’ intentions, and mortgage refinancing, delinquency, or default rates.

Suggested Citation

  • James A Wilcox, 2015. "The Home Purchase Sentiment Index: A New Housing Indicator," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 50(4), pages 178-190, October.
    • Handle: RePEc:pal:buseco:v:50:y:2015:i:4:p:178-190
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/be/journal/v50/n4/pdf/be201527a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/be/journal/v50/n4/full/be201527a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stephane Dees & Pedro Soares Brinca, 2013. "Consumer confidence as a predictor of consumption spending: Evidence for the United States and the Euro area," International Economics, CEPII research center, issue 134, pages 1-14.
    2. Roberto Golinelli & Giuseppe Parigi, 2004. "Consumer Sentiment and Economic Activity: A Cross Country Comparison," Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2004(2), pages 147-170.
    3. Nguyen, Viet Hoang & Claus, Edda, 2013. "Good news, bad news, consumer sentiment and consumption behavior," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 426-438.
    4. Carroll, Christopher D & Fuhrer, Jeffrey C & Wilcox, David W, 1994. "Does Consumer Sentiment Forecast Household Spending? If So, Why?," American Economic Review, American Economic Association, vol. 84(5), pages 1397-1408, December.
    5. repec:cii:cepiei:2013-q2-134-1 is not listed on IDEAS
    6. Jason Bram & Sydney C. Ludvigson, 1998. "Does consumer confidence forecast household expenditure? a sentiment index horse race," Economic Policy Review, Federal Reserve Bank of New York, vol. 4(Jun), pages 59-78.
    7. Robert B. Barsky & Eric R. Sims, 2012. "Information, Animal Spirits, and the Meaning of Innovations in Consumer Confidence," American Economic Review, American Economic Association, vol. 102(4), pages 1343-1377, June.
    8. Gad Levanon, 2011. "Forecasting Recession and Slow-Down Probabilities with Markov Switching Probabilities as Right-Hand-Side Variables," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 46(2), pages 99-110, April.
    9. Batchelor, Roy & Dua, Pami, 1998. "Improving macro-economic forecasts: The role of consumer confidence," International Journal of Forecasting, Elsevier, vol. 14(1), pages 71-81, March.
    10. Ho, Chienwei & Hung, Chi-Hsiou, 2009. "Investor sentiment as conditioning information in asset pricing," Journal of Banking & Finance, Elsevier, vol. 33(5), pages 892-903, May.
    11. Michael Lemmon & Evgenia Portniaguina, 2006. "Consumer Confidence and Asset Prices: Some Empirical Evidence," The Review of Financial Studies, Society for Financial Studies, vol. 19(4), pages 1499-1529.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lucy F. Ackert & Stefano Mazzotta, 2021. "Homeownership for All: An American Narrative," JRFM, MDPI, vol. 14(6), pages 1-14, May.
    2. Chung-Chu Liu & Jason C. H. Chen & Che-Cheong Poon, 2019. "Perception Types Of Home Buyers By Q Methodology: A Comparative Study Of Hong Kong, Taiwan, And The Usa," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(01), pages 235-257, March.
    3. Héctor Saldaña-Márquez & Diana C. Gámez-García & José M. Gómez-Soberón & Susana P. Arredondo-Rea & Ramón Corral-Higuera & María C. Gómez-Soberón, 2019. "Housing Indicators for Sustainable Cities in Middle-Income Countries through the Residential Urban Environment Recognized Using Single-Family Housing Rating Systems," Sustainability, MDPI, vol. 11(16), pages 1-29, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. S. Heravi & J. Easaw & R. Golinelli, 2016. "Generalized State-Dependent Models: A Multivariate Approach," Working Papers wp1067, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Vincenzo Merella & Stephen E. Satchell, 2019. "Asset pricing with utility from external anticipation," Carlo Alberto Notebooks 589, Collegio Carlo Alberto.
    3. Erik Kole & Liesbeth Noordegraaf-Eelens & Bas Vringer, 2019. "Cognitive Biases and Consumer Sentiment," Tinbergen Institute Discussion Papers 19-031/I, Tinbergen Institute, revised 21 Mar 2023.
    4. Ahmed, Huson Joher Ali & Azad, A.S.M. Sohel & Poon, Wai Ching & Safiullah, Md, 2023. "Is there a CSI-leverage nexus?," International Review of Financial Analysis, Elsevier, vol. 89(C).
    5. Marie‐Helene Gagnon & Celine Gimet, 2020. "Unconventional economic policies and sentiment: An international assessment," The World Economy, Wiley Blackwell, vol. 43(6), pages 1544-1591, June.
    6. E. Kilic & S. Cankaya, 2016. "Consumer confidence and economic activity: a factor augmented VAR approach," Applied Economics, Taylor & Francis Journals, vol. 48(32), pages 3062-3080, July.
    7. Eleni Zafeiriou & Constantinos Katrakilidis & Chrysanthi Pegiou, 2019. "Consumer Confidence on Heating Oil Prices: An Empirical Study of their Relationship for European Union in a Nonlinear Framework," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 63-90.
    8. Merella, Vincenzo & Satchell, Stephen E., 2022. "By force of confidence," European Economic Review, Elsevier, vol. 150(C).
    9. Antonello D Agostino & Caterina Mendicino & Caterina Mendicino, 2015. "Can consumer confidence provide independent information on consumption spending?," Working Papers 2, European Stability Mechanism.
    10. Hatice Gökçe Karasoy Can & Çağlar Yüncüler, 2018. "The Explanatory Power and the Forecast Performance of Consumer Confidence Indices for Private Consumption Growth in Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(9), pages 2136-2152, July.
    11. Christiansen, Charlotte & Eriksen, Jonas Nygaard & Møller, Stig Vinther, 2014. "Forecasting US recessions: The role of sentiment," Journal of Banking & Finance, Elsevier, vol. 49(C), pages 459-468.
    12. Aneta M. Klopocka & Rumiana Gorska, 2021. "Forecasting Household Saving Rate with Consumer Confidence Indicator and its Components: Panel Data Analysis of 14 European Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 874-898.
    13. Hamid Baghestani & Ajalavat Viriyavipart, 2019. "Do factors influencing consumer home-buying attitudes explain output growth?," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(5), pages 1104-1115, August.
    14. Hamid Baghestani, 2017. "Do US consumer survey data help beat the random walk in forecasting mortgage rates?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1343017-134, January.
    15. Hassan Gholipour Fereidouni & Reza Tajaddini, 2017. "Housing Wealth, Financial Wealth and Consumption Expenditure: The Role of Consumer Confidence," The Journal of Real Estate Finance and Economics, Springer, vol. 54(2), pages 216-236, February.
    16. Caglayan, Mustafa & Xu, Bing, 2016. "Sentiment volatility and bank lending behavior," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 107-120.
    17. Hamid Baghestani & Sehar Fatima, 2021. "Growth in US Durables Spending: Assessing the Impact of Consumer Ability and Willingness to Buy," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 17(1), pages 55-69, April.
    18. Sudeshna Ghosh, 2021. "Consumer Confidence and Consumer Spending in Brazil: A Nonlinear Autoregressive Distributed Lag Model Analysis," Arthaniti: Journal of Economic Theory and Practice, , vol. 20(1), pages 53-85, June.
    19. Baghestani, Hamid & AbuAl-Foul, Bassam M., 2017. "Comparing Federal Reserve, Blue Chip, and time series forecasts of US output growth," Journal of Economics and Business, Elsevier, vol. 89(C), pages 47-56.
    20. Ahmed, M. Iqbal & Cassou, Steven P., 2016. "Does consumer confidence affect durable goods spending during bad and good economic times equally?," Journal of Macroeconomics, Elsevier, vol. 50(C), pages 86-97.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:buseco:v:50:y:2015:i:4:p:178-190. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.