ECON 255 Lecture Notes - Freddie Mac, Aggregate Demand, Conforming Loan
Document Summary
Regardless of any event, housing price always goes up but its rate is escalating. For price to increase, the demand has to increase faster than the rate of supply. Ultimately: the jump in the rate of the rate of housing can be explained by the rate of demand drivers > supply drivers. Decreasing income (recession) and stagnating total population data pulled between 2000 2004 shows that: 1) income decreases and 2) population increases. Calculation: in 2000, number of house is 115mil. 4 years (2000-2004) = 7. 2mil 7. 2mil/115mil(the number of house in 2000) = 6% of the housing supply. Bizarre result: naturally, when income decrease and at the same time the housing supply increases, the price of the house should go down. So, interest rate per year = . For each month, will have to pay approx. Then, the family moved out and rented the house for because they need the money.
