The Housing Market Recovery Index ( Housing Mri ) Research Project

701 Words Sep 5th, 2014 3 Pages
Highlighting an interesting topic in the economic sector, Mr. Rick Newman develops a valuable analysis based on the data extracted from the Housing Market Recovery Index (Housing MRI) research project. Using two different charts that belong to the same general data (the market’s leading housing recovery cities and the market lagging housing recovery cities), this economist creates a close relationship between Unemployment Rate and the Average home price change since the housing market bottomed out. Mainly based on percentages and average data, the author states a negative correlation between these two terms (as home price changing percentage increases, unemployment rate decreases; and vice versa). In the leading cities, the average unemployment rate was 7.1%, which is the below the media value (7.4%), and the home price change percentage was 62.6%. In the other hand, the lagging cities had an average unemployment rate of 9.3% (way over the media), and the home price change percentage was 15.9%. These percentages clearly demonstrate the negative correlation! But to approach this problematic from a different angle, we should first take a look at the main cause in this research: The Housing Bubble in 2007-2009. In this period of time, a sudden change in house pricing, created an economic threat that the U.S. Secretary of the Treasury in 2007, Henry Paulson, cataloged as "the most significant risk to our economy." It reached its peak level in 2005-2006, then significantly…

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