Objective: To analyze changes in the relationship of home prices to rents in you

Objective: To analyze changes in the relationship of home prices to rents in your market area using indexes.
Format: Submit your Excel calculations in format similar to that shown in the example in class (it doesn’t have to look exactly the same).
Data: Use data on median rents (in dollars) and home prices (Case-Shiller Home Price Index) for your chosen market area from the data file labeled “Metro Rents & Home Prices_2022” posted on Brightspace in the content folder “Working With Indexes.”
Step 1: Create an index (2010=100) of median rents in your metro area using the data provided.
Step 2: Compute the annual percentage change in the created rent index from 2011 to 2022 and compute the compounded average percentage change (CAGR) for that rent index over that period of time.
Step 3: Re-base the Case-Shiller HPI for your metro to 2010=100.
Step 4: Compute the annual percentage change in the re-based Case-Shiller HPI index from 2011 to 2022 and compute the compounded average percentage change (CAGR) of home prices over that period of time.
Step 5: Using your rent index and the re-based Case-Shiller index for your area, create a new index showing the relationship of home prices to rents in your market area for each year 2011-2022 with 2010 serving as the base year (2010=100).
Step 6: In a text box on your Excel sheet, state briefly what your results say about changes in the relationship of home prices to rents in your market area.