Housing Market

Prices in the housing market in the U.S. are tracked using the Case-Schiller index.

The National Association of Realtors maintains a Housing Affordability Index, calculated by dividing average income by average mortgage payments.

National Association of Realtors housing sales data.

Great chart on dangerous loans. Why would people take out such large loans? There are a number of possible reasons:

  • Speculation: they believed that prices could only go upwards, so they could sell ("flip") or refinance
  • Asymmetric payoffs: they planned just to walk away if prices fell

4/29/09 WSJ has a summary of house price data in major metro areas.

Forecasting House Prices

Housing prices characterized by mean reversion in the longer term and momentum in the short term.

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