A New House-Economy Essay

XECO/212 Principals of Economics
Nicholas Kuzmich
12/11/2011
A New House-Economy
Buying a home is not simple decision, and a lot of thought and know-how has to be implemented before purchasing new home. A homes value can be greatly affected by the economy as a whole and can become a great investment or great mistake. Using the marginal benefit marginal cost concept one could make the better decision of whether to buy or not. A person would need to analyze the benefits of purchasing the house such as: what kind of neighborhood is surrounding the house is the house near shopping areas, and if the house is in great condition. An example of cost is would I lose money after purchasing the house, does the house have a fixed or adjustable rate mortgage, and could the area potentially bring the property value of the house down. Tax deduction on a mortgage interest rate could possibly make it more inviting to purchase the home because of the possible lower interest rate. This would help make houses more affordable, ultimately bringing in more potential buyers. If the government persisted to print money that the economy does not have it could cause a rise in inflation. When this happens lowers the property value of a home because the banks will increase the interest rates for homes forcing people to move out. The more potential home owners that lose their homes affect the value of your home because no one really wants to buy a home surrounded by a bunch of empty buildings. [continues]

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