Personal Experiences and House Price Expectations: Evidence from the Canadian Survey of Consumer Expectations

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In this work, we use novel Canadian survey data to study how expectations of future changes in house prices are influenced by personal experiences. We find that recently experienced changes in local house prices are routinely extrapolated into expectations of year-ahead changes in national house prices. In addition, individuals who have experienced higher volatility in house price changes in the recent past are more uncertain about their expectations of future house price changes. Our results are broadly consistent with those from related work using the Survey of Consumer Expectations conducted by the Federal Reserve Bank of New York (Kuchler and Zafar 2015).