A New Index of Housing Sentiment

Lasse Krøgholt Bork, Stig Vinther Møller, Thomas Quistgaard Pedersen

Research output: Contribution to journalJournal articleResearchpeer-review

20 Citations (Scopus)
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We propose a new measure for housing sentiment and show that it accurately tracks expectations of future house price growth rates. We construct the housing sentiment index using partial least squares on household survey responses to questions about buying conditions for houses. We find that housing sentiment explains a large share of the time-variation in house prices during both boom and bust cycles and it strongly outperforms several macroeconomic variables typically used to forecast house prices.
Original languageEnglish
JournalManagement Science
Issue number4
Publication statusPublished - 5 Aug 2019


  • Housing sentiment
  • house price forecastability
  • partial least squares
  • dynamic model averaging


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