A New House - Essay

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A New House-Decision 1 A New House-Decision Angel M. Davis Axia College at University of Phoenix A New House-Decision 2 In this paper I will discuss which principles of economics directly relate to my decision of purchasing a new house. I will discuss the marginal benefits and cost which will help me make a firm decision. I will also explain how the strength of the economy affects my decision. I will also asses how international trade and the domestic economy played a role in the strength of the economy. I think that principle one, four, and seven are important to the decision making process of buying a house.…show more content…
I think the government affects the housing market by increasing and decreasing taxes and encouraging government spending by providing stimulus packages to the American people. I personally like stimulus pacakages, but in reality it is government spending money that we will eventually have to pay back. When people stop buying houses, housing prices and mortgage rates decrease. A New House-Decision 5 If housing starts increase this would benefit me because I would have more houses to choose from, but then I have to think about the higher prices because demand for houses will increase. I would really have to pay attention to the cost verses the benefits if housing starts do increase. Another issue I have to reflect on is tax deductions on mortgage interest rates. I think such a deduction would hinder the benefits of owning a home. If tax deduction on mortgage interest was to be removed then the after-tax cost would increase which would reduce housing prices. The removal of such a tax might entice me to buy a bigger home and then borrow beyond my means. This tax cut could discourage me from becoming a homeowner as well. As I mentioned earlier in this paper, incentives may encourage me to reevaluate my decisions. When a government offers tax credits it can be considered a benefit that will out-weigh the cost. The domestic economy and international trade play a huge role in our economy. International trade stimulates our

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