The National Association of Realtors Existing-Home Sales Series provides a measurement of the residential real estate market. One of the measurements it produces is the Housing Affordability Index (HAI), which is a measure of the financial ability of U.S. families to buy a house. A value of 100 means that families earning the national median income have just the amount of money needed to qualify for a mortgage on a median-priced home; higher than 100 means they have more than enough, and lower than 100 means they have less than enough. The file titled Index contains the HAI and associated variables.
a. Produce the correlation matrix of all the variables. Predict the variables that will remain in the estimated regression equation if standard stepwise regression is used.
b. Use standard stepwise regression to develop an estimate of a model that is to predict the HAI from the associated variables found in the file titled Index.
c. Compare the results of parts a and b. Explain any difference between the two models.