Title of Lesson:
Buying a House
http://www.uwlax.edu/faculty/skala/Buying-a-House.htm
Date: Timeframe of Lesson:
2-5 Periods

Author(s):
Judy Young
(I found this lesson on ideas.wisconsin.edu)
School District: N/A
Campus: N/A
Subject Area(s):
Applied Math, Algebra II, Economics, Business

Grade Level(s)/Course:
Recommended for Applied Math or Algebra II (Grades 11-12), but I could modify it for my Algebra 1 kids (Grades 9-10)


State Standards
http://www.dpi.state.wi.us/dpi/standards/
Subject Specific:
Mathematics:A.12.1. Use reason and logic to evaluate information, perceive patterns, identify relationships, formulate questions, pose problems, make and test conjectures, and pursue ideas that lead to further understanding and deeper insights.
A12.2. Communicate logical arguments and clearly show why a result does or does not make sense, why the reasoning is or is not valid.

B12.5. Create and critically evaluate numerical arguments presented in a variety of classroom and real-world situations (e.g., political, economic, scientific, social).
E12.1 Work with data in the context of real-world situations by formulating hypotheses that lead to collection and analysis of one- and two-variable data, using technology to generate displays, summary statistics and presentations.
F12.1 Analyze and generalize patterns of change (e.g., direct and inverse variation) and numerical sequences, and then represent them with algebraic expressions and equations.
F12.1 Use mathematical functions (e.g., linear, exponential, quadratic, power) in a variety of ways, including recognizing that a variety of mathematical and real-world phenomena can be modeled by the same type of function, translating different forms of representing then (e.g., tables, graphs, functional notation, formulas), describing the relationships among variable quantities in a problem, using appropriate technology to interpret properties of their graphical representations (e.g., intercepts, slopes, rates of change, changes in rates of change, maximum, minimum).
F12.3. Solve linear and quadratic equations, linear inequalities, and systems of linear equations and inequalities either numerically, graphically, including the use of appropriate technology, or symbolically.
F12.4. Model and solve a variety of mathematical and real-world problems by using algebraic expressions, equations and inequalities.

Science:C12.3. Evaluate data collected during an investigation, critique the data-collection procedures and results, and suggest ways to make any needed improvements.

Social Studies:
A12.2. Analyze information generated from a computer about a place, including statistical sources, aerial and satellite images, and three-dimensional models.
D12.1. Explain how decisions about spending and production made by households, businesses, and governments determine the nation’s levels of income, employment and prices.
D12.2. Use basic economic concepts (such as supply and demand; production, distribution and consumption; labor, wages and capital; inflation and deflation; market economy and command economy) to compare and contrast local, regional, and national economies across time and at the present time.
D12.6. Use economic concepts to analyze historical and contemporary questions about economic development in the United States and the world.
D12.11. Explain how interest rates are determined by market forces that influence the amount of borrowing and saving done by investors, consumers, and government officials.

Information and Technology Literacy:

A.12.3 Use a computer and productivity software to organize and create information
A.12.5 Use media and technology to create and present information
B.12.5 Record and organize information

B.12.6 Interpret and use information to solve the problem or answer the question

D.12.2 Use information, media, and technology in a responsible manner

Stated Objective(s)




To use the Internet to find current home prices, mortgage rates and salaries in different parts of the United States.
To compare median and mean prices of homes.
To find the monthly payment needed to purchase a home.
To use the Internet to find historical data about home prices.
To create a graph showing how the cost to purchase an average priced home has changed over the past thirty years.
To create a best-fit curve for the yearly change in purchase price and predict the cost of an average priced home in the future.
Procedures for Lesson



Students will search the Internet for the required information and complete the Activity Sheets. If desired, they may share information about housing and create a class table or graph.

Part I "Comparing Home Prices"
You will choose three different areas of the United States and find the mean and median costs of a single family home for those areas.

Part II "Mortgages"
Use the Internet to find the current average mortgage rates for the three states you used above. Calculate how much your downpayment would be if the bank required it to be 15% of your mortgage. Then calculate the monthly mortgage payments and what salary you would need to have in order to afford the house. Then find what type of jobs would have this salary.

Part III "How the Cost of a Home has Changed"
Various government agencies keep records on home prices in the United States. Compare the median price for the entire U.S. with the mean ("average") price for the U.S. for various years.
Do some more research and create a graph showing how the cost to purchase an average priced home has changed over the past thirty years using Excel. Make a linear best fit line and exponential best fit line that fits your data. Determine which best fit line more accurately represents the data on your graph. Predict the cost of a home in the future.

Assessment or Evaluation



There are point values assigned to each question on the Activity Sheets.
Enrichment



Students can share results and make a class histogram showing median price of a home for the different cities or states they chose. Students may wish to find average salaries for the cities they studied and decide if home prices are comparable. They can pick an occupation and find out what the average salary is, determine what price house they could afford, see if they can find an available house for this price and create a budget. Students may see how monthly mortgage payments vary as the interest rate changes and how much house they can afford.
Materials

Activity Worksheets.
Internet access.
TI-83 or similar calculator or software to evaluate financial functions and perform curve-fitting recommended.
Microsoft Excel.


Technology Resources:
http://new.realtor.com

http://www.bankrate.com

http://www.bls.gov/oco/

http://www.huduser.org/periodicals/ushmc/fall97/histdat2.html