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These models and simulations have been tagged “Assignment3”.
This insight demonstrates the effects of both supply and demand directly relating to price in conjunction with the change in interest rate. This system represents a 5 year period broken into monthly periods.
The number of buyers and sellers are both demonstrated as stocks which in turn are affected by the number of houses purchased and indirectly related to new investors and a growth in housing per period.
There is a 20% growth rate of new housing with a investor growth rate proportional to the current interest rate as well as being affected by the current number of potential buyers. All other initial values are either predefined or generated in relation to its links to other stocks/variables.
Price can be understood to be directly related to the ratio of both buyers and sellers and in turn loop to affect the change in the numbers of Houses For Sale and Potential Buyers. It is also directly related to the number of people looking to purchase as a ratio of those looking to purchase and houses for sale.
Sales are generated when a purchase is made therefore modifying the number of buyers and sellers in the market at time the sale is generated.
Setting only the Interest Rate as a changing variable, the slider can be used to understand that an increase in interest rate lowers the number of potential buyers, whilst a decrease in interest rate increases the likelihood for investors and new home buyers to enter the market.