Week 9 Final Project_A New House_Decision

Week 9 Final Project_A New House_Decision - Running head: A...

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Running head: A NEW HOUSE - DECISION 1 A New House - Decision Donna Kelly Alcorn XECO/212 Principles of Economics November 6, 2011 Dana Williams, DBA candidate
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A NEW HOUSE - DECISION 2 A New House – Decision Whether to buy a home or not is a life changing decision and experience. Therefore; when deciding to buy a home all aspects should be considered. The Ten Principles of Economics is a good tool to use when making a decision to make large purchases like buying a home. “These Ten Principles of Economics offer an overview of what economics is about” (Mankiw, retrieved on November 4, 2011). The first four principles will help to make purchasing decisions, the next three principles explains how the economy works as a whole, and the last three show how you should interact. Comparing cost and benefits of either buying a house or renting a larger apartment in and important part of the decision process in terms of long-term and short-term benefits and financial responsibility. Using principle one there may be some tradeoffs that need to be made in order to make the best decision. In a new house there will be more space and will allow us to pick a location that is closer to better schools, but we may have to cut back or cut out some luxury items to adjust to the change in the budget so we are able to afford a new home and the extra expenses that go along with it. Some added expenses of owning a new home include property taxes, home owners insurance, home owner’s association dues, and maintenance costs. Some important choices to consider when thinking about buying a home is whether you have the income to take on these extra expenses or if it would be better to stay where you are, or to rent a bigger apartment. With a larger place you will need to also consider that the monthly bills are going to be higher and the commute could be longer from home to work and would cost more. All of these extra expenses need to be looked at carefully before making a decision on such a large purchase. You need to also consider that after the purchase of a home if inflation were to happen the house would then appreciate in value, which would make buying a home a very good
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A NEW HOUSE - DECISION 3 decision. However; if the price is already inflated due to the economy then buying a home would not be a good decision and it might be best to wait until the economy returned to normal. Renting a while longer might be a better choice at this point. When renting you will not have the extra costs associated with buying a home. However; you must also consider that you will never own that property. There are definitely tradeoffs and benefits that should be carefully considered when considering a large investment like buying a home. Another factor to consider is current market
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This note was uploaded on 02/28/2012 for the course ECONOMICS XECO 212 taught by Professor Tsilis during the Spring '09 term at University of Phoenix.

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Week 9 Final Project_A New House_Decision - Running head: A...

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