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Business Problem Formulation and Preliminary Research:
Home Mortgage Rates, 26 months
Danielle Rucker, Larisha Merritt, Anthony Interlandi, Erica Ziegler
University of Phoenix
April 7, 2011
Dr. Greg Michalski
Business Problem Formulation and Preliminary Research,
Home Mortgage Rates, 26 Months
This paper will document and examine the movement of the average monthly 30-year fixed mortgage rate for single family homes during the last 26 months. Overall, since June 2009 mortgage rates drifted downward, with some fluctuation, from 5.80% to a low of 4.64% in October 2010. The rate has since risen in each consecutive month to stand at 5.26% in February 2011. In this preliminary research report, Team B will provide background about the national economic context of recent mortgage rate movements, information about the organization from which the team obtained the data and a table and graph showing the monthly figures. Team B provides this information in preparation for a detailed statistical examination of the data in Week Three and a presentation, in Week 6, of the broader implications of the average monthly mortgage rate, including a possible forecast of rate movement in order to apply skills learned in the upcoming weeks.
In the earlier part of the last decade (2000-2004), mortgage rates declined as lending standards loosened, precipitating a boom in home building, real estate prices and single family home ownership. By mid decade, interest rates began a steady rise, causing many sub-prime borrowers to default and many well-known financial institutions, such Bear Stearns and Lehman Brothers to collapse. The ensuing financial panic devastated the global economy and triggered a severe recession in the United States. Unemployment rose to over 10% and the rate has fallen grudgingly in a slow recovery.
Today, many people continue to lose their homes. Having lost their jobs, they cannot afford to pay their mortgages, causing foreclosures...
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