Question

In 2011 home prices and mortgage rates dropped so low that in a number of cities the monthly cost of owning a home was less expensive than renting. The following data show the average asking rent for 10 markets and the monthly mortgage on the median priced home (including taxes and insurance) for 10 cities where the average monthly mortgage payment was less than the average asking rent

City	Rent ($)	Mortgage ($)
Atlanta	840	539
Chicago	1062	1002
Detroit	823	626
Jacksonville, Fla.	779	711
Las Vegas	796	655
Miami	1071	977
Minneapolis	953	776
Orlando, Fla.	851	695
Phoenix	762	651
St. Louis	723	654

Enter negative values as negative numbers.

a. Develop the estimated regression equation that can be used to predict the monthly mortgage given the average asking rent (to 2 decimals).
The regression equation is:
Mortgage ($) =  +  Rent ($)

Answer 1

Mortgage ($)= 168.04 + 0.61Rent ($)