How Facebook Can Impact Your Homeownership Plans
Social media has exploded into every market. Businesses have realized the importance of using Facebook to reach their clients. Family members and friends connect over the platform. Facebook reviews allow people to see what others think about just about everything. Well, it appears that your Facebook feed now has an affect on what your homeownership.
The National Bureau of Economic Research published a paper that released information showing that what Facebook users see on their feed actually plays a role in what actions they will take in the housing market. They analyzed over 1 million homeowners and over 400,000 public deeds of renters and here is what they found.
If You Hear About Good Experiences You Are More Likely to Buy
The study found that Facebook users that saw their friends posting about positive experiences in the real estate industry were more likely to buy. That’s right, people who read that their friends have experienced appreciation on their property over the last several years, are more likely to believe that real estate is a good investment for them as well.
In fact, it makes them 3.1% more likely to purchase a home within the next two years. They are also more likely to purchase a bigger house, spend more money on it, and make a larger down payment.
If You Hear the Bad, You Stay Away
Facebook users who have friends sharing on the platform about bad real estate experiences are less likely to jump into the homeownership market. If a friend has lost money in the market or are struggling with the financial responsibilities of owning a home, people are less likely to want to buy a house.
We easily relate with the people that are in our life and that we connect with on social media. When we see people we care about struggling with owning a home, it makes us think twice about getting into the same situation. The study actually found that homeowners in this experience were actually 1% more likely to sell their current house.
Why it Matters
The millennial generation has grown up with social media and they are also the generation that is taking longer than ever to become first-time homeowners. Once they hear the negatives about homeownership from their peers, it makes them want to avoid the same situation.
As a society, we identify with the people that we are close with in life. When we see someone succeed at something, like buying and enjoying a home, it creates that desire within us to have the same.
People might think they would be unable to obtain a mortgage and purchase a home until they hear that others like them are doing it. It makes it seem like an achievable dream that is worth pursuing.
However, when we hear of someone who wishes they hadn’t bought their house it makes us doubt that we want to own a house as well because we don’t want to end up in the same situation. While learning from other’s experiences can be helpful, make sure you don’t get persuaded into something you don’t really want to do.