Learning and Conclusions

With the plethora of information at our disposal to investigate trends in the real estate market, we have uncovered several conclusions. Firstly, we found that before the COVID pandemic, inflation was not the best indicator of sudden changes in home prices. Although both have trended positively since the late 1980s (when our data set begins), there have been several instances where a sharp change in the slope of home prices has not correlated with a sharp change in the rate of inflation. However, we found that the COVID pandemic is an exception, as the inflation rate rose sharply as housing prices rose sharply. Next, we found that an increase and decrease in federal funds is actually a great indicator of 30-year mortgage rates. Furthermore, using an additional incredibly detailed data set, we found that home prices vary drastically across different U.S. states. Additionally, when analyzing state housing prices over time, it can be seen that some states have seen more drastic changes in pricing over time than others. Lastly, and most importantly, we found that there are a multitude of factors that influence the real estate market in the United States. And although we were able to compare prices to several economic conditions, there exists many other factors that influence real estate prices as well.