Mortgage rates have been the highest in the US over the last 20 years. Inventory shortage and high inflation have driven home prices up. I have analyzed this situation by taking FMCC as an indicator of the American housing market. I’ve examined the distribution of Freddie Mac(
FMCC) before and after the mortgage crisis period.
While I did that, I added some variables I thought were related. One of them is the 10-year Treasury yield interest rate (
TNX), which pertains to treasury bonds the U.S. government borrows money by issuing a 10-year term. The other one is the Federal Fund rates (
Finally, we’ve forecasted the next 2 years for the whole variables with the GluonTS DeepAR model of the modeltime package. Unfortunately, this model is not reproducible, which means every time we run the model, different results come up. The source code has been embedded in the dashboard.
When we look at the forecasting charts, we might say that as the interest rates go down, the housing market will rise again in the coming terms.