Predicting House Prices using Machine Learning
“The two questions that anyone ever asks me are: ‘Are house prices going to go down?’ and ‘Is it a good time to fix my mortgage rate?’ ”
— Evan Davis
The Housing Market
When people purchase or sell houses, either to live in or as an investment, this is referred to as the housing market. A house is the most valuable item most people will ever own in their lifetime.
The housing market is closely tied to consumer spending. When house prices go up, homeowners are better off and feel more confident. Some people will borrow money against the value of their home, either to spend on goods and services, home improvements, or pay off other high interest debt.
When house prices go down, homeowners risk that their house will be worth less than their outstanding mortgage. People are therefore more likely to reduce their spending and postpone making any personal investments.
Recently the housing market has been strong, thanks to low mortgage rates, a limited supply of homes on the market and pent-up demand from consumers locked in the last year by the pandemic.
Factors That Influence Housing Prices
There are several factors that can influence the value of a house. Listed below are some of the most…
