ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Problem 1: The following two figures illustrate historical home price trend and interest rate for the 30-years fixed rate mortgage in the United States. Based on the information, please answer the following questions if today were in 2013.
- Assuming that history will repeat itself, what do you think of the U.S. housing market for the next 10 years? How about mortgage rate for the next 10 years?
- Based on your prediction, answer the two questions below:
a)If you have money, should you invest in the housing market?
b)If your answer in a) is “Yes”, and one lender allows you to borrow money, should you borrow money to buy the property? Why?
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