A New House Economy

In: Business and Management

Submitted By DeannaEve
Words 323
Pages 2
Running Head: New House

New House:
Economy
Deanna Arneson

Explain how the strength of the economy as a whole could affect the marginal benefits and marginal costs associated with a decision to purchase a home. During our current economic situation, large amount of forecloses and high rate of empty homes, I would say the marginal benefit is that there are several homes on the market to choose from. Because of this plentiful amount of homes available the purchase price and value of the homes is dropping. This makes the marginal costs of a home lower because the amount of homes on the market is higher than it used to be and the price is lower for buyers.
How does the removal of the tax deduction on mortgage interest affect the housing market? If the government was to remove the tax deduction on mortgage interest the mass population would look closely into owning a home verses renting a home. One of the benefits to owning a home is the tax deduction you have each year. If you do not have that deduction, will that mean you will need to only pay taxes on your home? What is the benefit to that? I think that several people will make the choice to rent rather than owning a home.
How do other changes in government spending and taxes affect your decision? Property taxes and local taxes such as school taxes would make a big impact on my decision to purchase a home. I know that the property taxes in my county are extremely high for the area and it makes a harder impact on property owners. A large complaint I get from other home owners is also the school taxes. They feel as if they already either put their children through school or do not plan to have children attend school so they should be in charge of paying school taxes that keep getting…...

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