Factors Influencing US House price
Business Statement
We need to find out the factors influencing the house price in the US nationally.
About data
Data are accessed through the federal reserve of economic data through a Fred API which is open sourced and the period of the data is 20 years.
I built my data set with a dependent variable of house price which is seasonally adjusted and an independent variable such as GDP rate, fuel, population growth, personal income, interest rate, new house construction, and unemployment rate.
Exploratory data analysis
Let’s look at what data we got and how it was distributed
During the recession period of the US, there was a dip(reduced price) and also during the Covid-19 everything features went down because of the lockdown and health issues.
Predicting the house price index for the next 365 days projection
Time projection for the next 365 days. It looks like there might be a dip in house prices second half of the next year(2024)
This model is done using the time series FB Prophet for the prediction of the next 365 days and analysis of the data as a time series regression problem.
Feature importance and most feature affecting the house price indexing.
Feature affecting house price
Once the data is feature-engineered we get a few extra columns based on the times which is a high correlation to the house price index and the fewer feature column such as GDP rate, and population growth which is taken out
Error rate and Learning rate of the model
Build the model on both machine(Random forest regressor) and deep learning models (fastai and PyTorch).
Error rate vs. Learning rate
Our model is performing well because the error rate is reduced and the learning rate of the model we found was giving good results.
Conclusion
Seven features from our data set highly influence the house prices nationally are listed below:
Unemployment rate,
ds elapsed (Time elapsed)
personal income
year
fuel
new house
interest rate
Thera might customer preference, mortgage value and location also play vital role in determining the price