A Study Of The Economic Forecasting Of New One Family Households

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A STUDY OF THE ECONOMIC FORECASTING OF NEW ONE FAMILY HOUSEHOLDS SOLD IN THE US – AN ANALYSIS Context and Objective of the Analysis The US housing industry has witnessed a downward trend post 2005 due to deteriorating macroeconomic conditions in the United States. The steep decline in the last 5 years has led to investigations on the future of the industry and understands the way forward for the industry. The report answers the following questions: How long is the fall in the industry going to continue? When is the recovery expected in the Housing Market? What is the future of the industry? The report is an attempt to understand the trends in the US New One Family Household market (herein referred to as NHS) and forecast the NHS…show more content…
Detailed study of the forecasts reveals that the housing industry is in a consolidation phase and the recovery of the industry is not expected in the next one year (2011). Historical Trend of NHS and impact of external factors – A qualitative analysis The US National Housing market, specifically the One Member Housing Market has seen a steep decline since the latter half of the last decade. The NHS data for the last 35 years (1975-2010) has been shows in the figure below. From the data, three specific trend profiles of the NHS can be witnessed; the period from 1975 to 1991, where the NHS showed a stable trend, the period from 1991 to 2005 where the NHS showed a steady acceleration and the period from 2005 onward showing a steep decline in the NHS numbers. Figure 1. NHS data (1000s) 1975-2010 A high level visual analysis of the data reveals a significant seasonality and trend factor. The next section we will attempt to understand the quantitative impact of the trend and seasonality factors. Relationship between Housing Data and Mortgage Rate & Disposable Income The decline can be attributed to the decline in the macroeconomic conditions in the US. However, an in-depth analysis of impact of specific economic indicators would be essential understand the way forward for the NHS. The data provided
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