Economics 309 Midterm One Fall 2003
Below is a table published by the Mortgage Bankers Association of America, and is used in questions 1 and 2.
| Industry Data: |
Last Updated:
5/8/2003 @ 9:30 a.m. |
| 1-to-4 Family Mortgage Originations 1990-2002 |
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| Total Volume (Mil. $) |
Refinance Share (%) |
Effective 30-yr mortgage rate |
|
| 1990 | 458,404 | 15 | 10.05 |
| 1991 | 562,074 | 31 | 9.34 |
| 1992 | 893,681 | 47 | 8.11 |
| 1993 | 1,019,861 | 52 | 7.13 |
| 1994 | 768,748 | 24 | 7.49 |
| 1995 | 639,436 | 21 | 7.85 |
| 1996 | 785,233 | 29 | 7.74 |
| 1997 | 833,650 | 29 | 7.68 |
| 1998 | 1,507,000 | 50 | 7.10 |
| 1999 | 1,285,000 | 34 | 7.25 |
| 2000 | 1,024,000 | 19 | 7.96 |
| 2001 | 2,030,000 | 57 | 7.03 |
| 2002 | 2,483,000 | 59 | 6.51 |
Source: HUD Survey of Mortgage Lending Activity, Mortgage Bankers Association of America, Federal Housing
Finance Board |
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1. (25 pts) Calculate the (a) Mean, (b) Median and (c) Standard Deviation for each of the following variables over the period 1990 to
2002:
(a) volume of family home mortgages in $millions.
(b) percentage of mortgages that were refinances.
2. (50 pts) Does there appear to be any relationship between home mortgage originations and the interest rate on mortgages? You may want to plot the series against each other. If using Excel, you can fit a trend line (try various kinds, such as linear, exponential, etc.) Can you see any relationship between refinances and the interest rate? If not, speculate why the data do not reveal a relationship, or why such a relationship might, or might not, exist.
3. (25 pts) Theory question, not related to data above. Describe under what conditions the mean and median of a set of numbers are equal. Even though you may provide an example in your answer, make sure your answer is general (i.e. not specific to the example.)