Interest rates for home mortgages have, in general, declined during recent month

Question

Interest rates for home mortgages have, in general, declined during recent months. With the apparent favorable influence for new-home building, there seems to be a clear relationship between X, the pre- vailing mortgage interest rates (in percent), and Y, the number of new houses being built per month in a midwestern city over a period of 18 months. A scatterplot of the data collected shows that the linear model is appropriate though not included here. According to the linear model built up in statistical software R, the equation of the linear least-squares regression line is 672.89-3065X and the

Explanation / Answer

For X=10.2 Y=350

Y-hat = 672.89-(30.65*10.2)=360.26

Residual = y-hat - y =360.26-350 =10.26

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