The two most important factors in determining how much the price of housing should be in any given area are household income and mortgage rate. For this assignment, I want you to create an Excel document showing the connection between mortgage rates and housing prices. I want to see how much house can a typical household in Utah can afford based on the mortgage rate. Here are the assumptions:
1. Assume that the typical household income is $80K a year.
2. Assume a conventional mortgage with a 20% down payment, and a 30-year fixed rate loan.
3. Assume that the mortgage payment-to-income ratio is at 30%.
4. Show mortgage rate change at 0.25%, going from 3% to 6%, and how much affordable housing price changes with the mortgage rate.