Social media has a profound impact on how we make our everyday decisions — from which detergent we’ll use to wash our clothes, the car we’ll purchase next or even what doctor we’ll choose for ourselves and our families. But how does social media influence one of the biggest decisions someone will make in a lifetime? New research sheds light on the effect of social networks on homeownership.
- The National Bureau of Economic Research released "Social Networks and Housing Markets," a new study that analyzed how friends within a social network (Facebook) impact real estate purchasing decisions.
- The study found that social networks do indeed have an influence. For example, individuals with friends who experienced a 5-percentage-point home price increase over the previous 24 months are more likely to transition from renting to owning.
- The impact goes beyond the micro level and can cause house price shocks throughout the country.