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The psychological explanation of homelessness revolves around the mental factors that lead to cases of homelessness. Fluctuations in economic conditions affect the personality of individuals by altering their confidence and preparation regarding financial stability. A weakening economy leads to impaired and unstable personality, which hampers people’s ability to acquire and retain a regular place to reside. For example, a person lacking any substantial income is likely to despair during tough economic times and opt to survive by begging for shelter from friends and relatives due to the perceived impossibility of improvement in income generation. The sociological view of homelessness relates to the exclusion of homeless people from other socio-economic groups due to exchanges and barriers that increase the tendency to homelessness. For example, the reluctance of employers to hire individuals who lack a physical address discourages the homeless people from pursuing better living conditions by seeking for employment. The economic perspective on homelessness relates to the decline in purchasing power due to low wages, increased rents and unemployment. For example, a decline in the real income for a household creates restrictions on the affordable rent, which means that hiked rents will directly translate into homelessness. Psychological, sociological and economic perspectives do not work separately but rather collaborate in influencing the tendencies to homelessness.

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