A “fear of missing out” is one reason Facebook users want to follow their friends and enter the world of homeownership.
Facebook influences people to do a lot of things they might not otherwise do, from trying a new coffee shop, to taking a rock climbing trip, to buying a new home.
CNBC reports that new research from economists at New York University, Harvard and Facebook found that social media is quite powerful. Renters with Facebook friends that had homes appreciate in the past two years are 3.1 percentage points more likely to buy a home themselves in the next two years.
It was also found that the same group was willing to pay 3.3 percent more for a house, make a seven percent larger down payment, and buy a 1.7 percent bigger house.
The idea is that Facebook friends would tell their renter buddies about their positive experiences with owning a house. The renters are compelled to buy due to a few factors. They obtain market-specific information from sources they trust, and they experience a “fear of missing out” on the upsides of owning a home.
The study results come from a survey of 1,242 Facebook users in the Los Angeles area. Researchers matched anonymized Facebook data to housing-transaction data from across the country to find the trends.