College

Buchtel College of Arts and Sciences (BCAS)

Date of Last Revision

2020-05-07 11:26:12

Major

Statistics - Actuarial Science

Honors Course

3470-498

Number of Credits

3

Degree Name

Bachelor of Science

Date of Expected Graduation

Spring 2020

Abstract

Rational Expectations Hypothesis is an economic theorem that states that our best way to predict the future is by looking at the past. While this theory is typically used to address inflation, the same concept can be used when predicting future home sales. With the failure of subprime mortgages and the burst of the housing market bubble in 2008, home sales are proven to be an appropriate indication of how the U.S. economy is performing. Through time series analysis, I will be able to construct a model with monthly home sales data from the U.S. Census Bureau. Due to seasonality within the data, an sARIMA modeling approach is required to fit the data. Once this model is built, I can test its accuracy to the dataset as well as make a forecast for the near future. Looking into the next five years, a forecast made by my sARIMA model of best fit predicts a slight decline in Home Sales across the country.

Research Sponsor

Dr. Nao Mimoto

First Reader

Dr. Richard Einsporn

Second Reader

Dr. Mark Fridline

Honors Faculty Advisor

Dr. Richard Einsporn

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