Core Insights - A study by the Federal Reserve Bank of Boston reveals that homeowners frequently misjudge their home values, which can significantly impact personal finance decisions [1][2][5] Group 1: Home Value Misestimation - 5% of homeowners undervalue their homes by $87,500, while another 5% overestimate by at least $53,000 compared to actual transaction prices [1][7] - Online databases like Zillow often provide inaccurate estimates, with 16% of their estimates being off by 5% or more [3] Group 2: Financial Implications - Misjudging home equity can lead to flawed decisions regarding borrowing, saving, and spending, affecting overall economic health [2][5] - Homeowners who overestimate their home values tend to feel wealthier, leading to increased spending and conservative investment strategies [4][7] - Those who overvalued their homes by $60,000 reduced risky stockholdings by 1.1% to 1.9% and increased consumption spending by 1.5% to 4.3% compared to accurately valuing homeowners [5]