Factors Affecting New House Purchase Decision

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A New House Decision 1) Discuss which principles of economics directly relate to your purchasing decision The fundamental rules of economics, the law of demand and supply, the theory of marginal utility all apply to the purchase of a home. However in modern times the purchase of a home is not merely a decision based on price, supply or demand or the financial capacity. Nor is it simply a decision based on the home as an investment that would be an appreciating asset in future. The investment decisions in a home would be a complicated one based on primarily affordability that is demand. Since demand is defined as the 'ability backed by willingness to pay' the demand plays a great role. That means the price of the property has to be just right and the costs that go into renovation--building and so on must somehow match the resources at hand and that also means that the house must have value that can appreciate with the mortgage costs. Generally Americans desire to own a home, and politically it was found necessary to make it the public policy to make home buying cheaper and easier. Apart from the economic factors it is argued that a home confers social benefits, "stabilizing neighbourhoods and making people more willing to invest in their communities". (Surowiecki, 2008) It is also a means of leveraging wealth and sort of financial security not to mention physical security as well. It thus is an alternate to being homeless or being on perpetual rent. These considerations
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