Quantifying Sentiment with News Media across Local Housing Markets

摘要

This paper develops first measures of housing sentiment for 34 cities across the United States by quantifying the qualitative tone of local housing news. Housing media sentiment has significant predictive power for future house prices, leading prices by nearly two years. Consistent with theories of investor sentiment, the media sentiment index has a greater effect in markets in which speculative investors are more prevalent and demand appears less informed. Directly examining the content across news articles finds that results are not driven by news stories of unobserved fundamentals.