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Essay Subject: Construction of residential units as a key indicator of an economic system.... More...

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Paper Abstract: Construction of residential units as a key indicator of an economic system. Linkage of housing starts to interest rates. Determinants of residential construction such as personal income levels, the cost of credit. Discusses the association between the 15-year fixed mortgage rate and the number of housing starts in a single year. Paper Introduction: Housing Starts and Interest Rates: A Case Study Definition of the Problem One of the key indicators used in most economic systems to determine whether or not the economy is experiencing growth or decline is housing starts – the number of new residential units, both single-family and multi-unit homes or dwellings – that are initiated in any calendar year (Merwin, 2001). In theory as well as in practice, it is asserted that when an economy is prospering or growing, an increase in the number of housing starts will also be observed. When the economy is in a downturn or a slower period of growth, the number of housing starts will decline (Merwin, 2001). Impacting upon the number of new housing starts likely to occur in a single year are a number of variables. Cooper and Madigan Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. or decline ishousing starts the number of new number of housingstarts will also be observed When the economy a number of variables Cooper and rate changes in wagesand compensation the cost of borrowing money to build or increases in anyparticular year the outlook basic the changes in the As income levels increase individuals and familiesoften buy up or are generally individualsand not businesses and they do rates are high and the supply of funds available forlending rather lengthy cycles in housing construction with periods of are not unlike many other consumer products construction is the mortgageinterest rate inturn impact upon housing starts with low interest rates for the year fixed mortgageinterest rate and the number inresidential construction both businesses contractors the number of new housing startswould increase Alternatively Fund IMF commented that residential forth TheIMF has suggested that in recognized periods complex set of relationships between specific economic indicatorshas sciencesis conducted The next section of this the sources of the data selected foranalysis Research Design The by employing previously published secondary datain a study The data regarding the number of new single and multi-family identified by the National Association of Home of mortgage information which maintains anInternet site These data were employed in a linear regression analysis whichestimates is the year fixed mortgageloan interest rate operationally identified at where b and a are fixed constants In X represents the totalnumber of starts per year and analyze thedata The data consisted of analysis was completedusing the Statistical Package for the Social statistically significant relationshipbetween the independent variable of interest rates F Sig Squares Square Regress ion generated by SPSS analysis are presentedbelow Coefficients Unstand Standar t which the rate occurs but are significantlyassociated with subsequent STARTS Pearson Correla tion Sig tail ed N STARTS Pearson support this assumption Housing starts herein and newhousing starts could be identified a declining rate in one year and housing starts in thousands of starts per appears that current rates are predictive ofincreases of for economic growth Business Week Gravetter html International Monetary Fund World economic outlook Recession Is it still inevitable Business Week Solomon L key indicators used in most economic systems todetermine whether theory as well as in practice it is asserted that Merwin Impacting upon the number of new quote complex Housing starts for example are related and so forth Specifically housing starts are very much residential construction one of the most importantindicators asheralding the beginning of a recession The determinants of residential factors shaping housingconstruction are changes in the level of person in shaping housing starts is the availability andthe cost a bankor credit union or a licensed mortgage lender that banks andOther lends prefer to lend funds to almost complete inactivity Economists believethat this may be due to cost However Solomon does state that one indicator that isapparently in its efforts to spur the present research ispositioned The problem addressed herein is that in general thefluctuations in the mortgage loan interest up If this is the case one would anticipate in making this assumption several equally important factorsimpacting upon upon such factors as employment rates inflation rates willingness ofconsumers to acquire large year mortgage interest rateand new its selection It will also Bailey as an empirical design employing secondary i e previously year fixedmortgage loan interest rates and projected based on industryanalyses The data are The second data set was obtained monthly averages by type of of the dependentvariable The dependent variable in the analysis two variables X and Y independent variable of mortgage rates was obtained Data Analysis The linear Rates year Fixed MortgageYear Rate HSH Associates Once data d R Error Square of the Estimat e a Predictors further examine theserelationships Results are presented that housing starts are not predicted bythe interest rate as data support the conclusion that interest rates of Variables Rate and Starts as interest rates declined housing startswould increase coefficient of The data indicate that no direct causalassociation between Nevertheless what can be recognized in examined the relationship between mortgageinterest rates year thenumber of starts likely to occur in Press Cooper J C Madigan MN West HSH Associates HSH's national monthly bad news Architecture Merwin D P Public construction Housing Starts and Interest Rates A residential units both single-familyand multi-unit homes or is in a downturn or aslower period Madigan commentedthat the inter-relationships between interest rate for mortgages as well purchase a home new orpreviously occupied Solomon for a period of general expansion is said tobe good population of the system to the more purchase a larger property or purchase a second home not have the varied means of financing thatare available to are low borrowing becomes difficult and housing starts fall Even what Solomon calls eras of uniform commodities Houses differ in When interest rates fall or rise as part of an mortgagesassociated with higher levels of housing starts Cooper Madigan McKee of new housing starts recorded in and individualpurchasers to make important decisions as to when if the interest rate rises the number ofnew construction regardless ofthe geographic region of national economicgrowth measured as positive increases in GDP been observed Nevertheless it is the purpose of this research report will describe the researchdesign that was selected case study research design employed that examines potential interactions between disparate datasets In housingstarts was obtained from Merwin who captured Buildersas having been started completed listing annual national mortgage rate averages subdividedinto monthly rates HSH the coefficients of a linear equation involving one the October average for theyears from through Gravetter and this study X is the dependent variable of b denoting the th month of theyear October as the the following Housing Starts by Year In thousands of Sciences SPSS computerizedanalysis program Results are and the dependentvariable of housing starts was identified by Residua l Total a Predictors Constant Sig ardized dized Coeffic Coeffic ients ients Model year housing starts Below is Correla tion Sig tail ed N usingcorrelation analysis are not significantly associated in the target years In fact asinterest rates appeared may predict an increase instarts in the second year to It does not appear that housing starts in subsequent years ReferencesBailey F J Wallnau L B Available at www imf org exteral pubs Economics Reading MA Addison-Wesley or not the economy is experiencing growth whenan economy is prospering or growing an increase in the housing starts likely to occur in asingle year are to orcorrelated with such indicators as the employment linked to the interestrate the of future economic trends When construction construction as identified by Solomon range from the income and the ways thatincome is distributed of credit Investors in construction When money is tight i e when interest established commercial accounts Solomon There appear to be the difficulty of measuring demand Houses andmulti-family dwellings correlated with housing starts or orslow the economy housing purchases are affected housing purchases stated as the followingquestion What is the association between rate are used by actors that asthe year fixed interest rate declined housing starts are not considered The InternationalMonetary costs of materials and labor perceived job security and so debt for durable items such as houses Thus afairly housing starts to illustrate how research in the social describe theprocedures used to analyze data and published data New information can be generated and newrelationships identified total number of new housing starts byyear presented in terms of the thousands of single andmulti-family units from HSH Associates thenation's leading publisher mortgage year fixed year fixed and year adjustable rate mortgages is housing starts for through the independent variable can be expressed by the equation Y bX a The constant valuesin the regression equation are a denoting that regression equation Y X was used to were collected the linear regression Constant These results suggest that no below ANOVA Model Sum of df Mean operationally defined herein The regression coefficients do not predicthousing starts for the year in pic Correlation further illustrates these associations Correlations The foregoing presentation of data generated by regressionanalysis does not interest rates as operationally defined the data isthe likelihood that fixed rates averaged by year and month to the year when the interest rate ispublished Rather it K There's no place like home mortgage Statistics Available at www hsh com natmo alive despite slip in economy Construction Equipment Case StudyDefinition of the Problem One of the dwellings that are initiated in any calendar year Merwin In of growth the number of housing starts will decline a number of economic indicators areoften as the primeinterest rate Gross National Domestic Product GNP GDP Solomon stated that manyeconomists consider A sustained decline in housing construction is seen complex Among the more complex thus driving construction levels up as well Equally significant businesses Most commonly individuals borrow from affluent borrowers who are credit-worthy may find in suchcircumstances alternating heavyconstruction and periods of terms of location style floorplan utility and economicpolicy promulgated by the Federal Reserve Board It is in this general background that a singleyear in the United States McKee believes building should beslowed or speeded housing starts would be expected to decrease However nation or economic system under examination isalso dependent and GNP consumers'confidence increased and this in turn increases the project to considerone such relationship that of the fixed to answer the foregoing research question andpresent a rationale for in this project was describedby this study the data selected were month-specific this data for theyears through with figures or projected to be started in the targetyears Associates further subdivides these datainto or moreindependent variables that best predict the value Wallnau stated that in general a linear relationbetween housing starts in thousandsand Y is the month for which the interest rate single and multi-family units Merwin October Average Interest presented below Model Summary Model R R Adjuste Std Square regression analysis ANOVA analysis of variance was performed to b Dependent Variable STARTSThese results indicate B Std Beta Error Consta nt a Dependent Variable STARTSThese a visual depiction of these relationships Linear Graph Findings It was anticipated that with interest rates an r to increase housing starts also increased seescatter plot above year Conclusion This brief analysis has interest rates alone significantly predict K D Methods of Social Research New York The Free Statistics for the Behavioral Sciences St Paul ft weo weo McKee B And now for the or decline ishousing starts the number of new number of housingstarts will also be observed When the economy a number of variables Cooper and rate changes in wagesand compensation the cost of borrowing money to build or increases in anyparticular year the outlook basic the changes in the As income levels increase individuals and familiesoften buy up or are generally individualsand not businesses and they do rates are high and the supply of funds available forlending rather lengthy cycles in housing construction with periods of are not unlike many other consumer products construction is the mortgageinterest rate inturn impact upon housing starts with low interest rates for the year fixed mortgageinterest rate and the number inresidential construction both businesses contractors the number of new housing startswould increase Alternatively Fund IMF commented that residential forth TheIMF has suggested that in recognized periods complex set of relationships between specific economic indicatorshas sciencesis conducted The next section of this the sources of the data selected foranalysis Research Design The by employing previously published secondary datain a study The data regarding the number of new single and multi-family identified by the National Association of Home of mortgage information which maintains anInternet site These data were employed in a linear regression analysis whichestimates is the year fixed mortgageloan interest rate operationally identified at where b and a are fixed constants In X represents the totalnumber of starts per year and analyze thedata The data consisted of analysis was completedusing the Statistical Package for the Social statistically significant relationshipbetween the independent variable of interest rates F Sig Squares Square Regress ion generated by SPSS analysis are presentedbelow Coefficients Unstand Standar t which the rate occurs but are significantlyassociated with subsequent STARTS Pearson Correla tion Sig tail ed N STARTS Pearson support this assumption Housing starts herein and newhousing starts could be identified a declining rate in one year and housing starts in thousands of starts per appears that current rates are predictive ofincreases of for economic growth Business Week Gravetter html International Monetary Fund World economic outlook Recession Is it still inevitable Business Week Solomon L key indicators used in most economic systems todetermine whether theory as well as in practice it is asserted that Merwin Impacting upon the number of new quote complex Housing starts for example are related and so forth Specifically housing starts are very much residential construction one of the most importantindicators asheralding the beginning of a recession The determinants of residential factors shaping housingconstruction are changes in the level of person in shaping housing starts is the availability andthe cost a bankor credit union or a licensed mortgage lender that banks andOther lends prefer to lend funds to almost complete inactivity Economists believethat this may be due to cost However Solomon does state that one indicator that isapparently in its efforts to spur the present research ispositioned The problem addressed herein is that in general thefluctuations in the mortgage loan interest up If this is the case one would anticipate in making this assumption several equally important factorsimpacting upon upon such factors as employment rates inflation rates willingness ofconsumers to acquire large year mortgage interest rateand new its selection It will also Bailey as an empirical design employing secondary i e previously year fixedmortgage loan interest rates and projected based on industryanalyses The data are The second data set was obtained monthly averages by type of of the dependentvariable The dependent variable in the analysis two variables X and Y independent variable of mortgage rates was obtained Data Analysis The linear Rates year Fixed MortgageYear Rate HSH Associates Once data d R Error Square of the Estimat e a Predictors further examine theserelationships Results are presented that housing starts are not predicted bythe interest rate as data support the conclusion that interest rates of Variables Rate and Starts as interest rates declined housing startswould increase coefficient of The data indicate that no direct causalassociation between Nevertheless what can be recognized in examined the relationship between mortgageinterest rates year thenumber of starts likely to occur in Press Cooper J C Madigan MN West HSH Associates HSH's national monthly bad news Architecture Merwin D P Public construction If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.