A New House Decision Essay
A home purchase is something most people get really excited for, it could be your first time buying a home, perhaps for an investment opportunity, or maybe it’s just the last house you plan to buy for your golden years. For whatever the reason that’s behind your purchase, out there in the land of opportunity, there are economic principles that you should think about during this life changing purchase your about to make. Principles of Economics describe at least 6 principles that can possibly relate to buying a home. This report will be discussing principles of economics that relate to home purchasing, new home purchasing along with its marginal benefits against marginal costs. Also it …show more content…
On to principle two, “the cost of something is what you give up to get it” This principle goes similar with the first principle, consumers facing trade-offs. A buyer must keep in mind the prices of homes in which they are looking at to buy. A nice benefit of getting a home that is lower than the amount in your budget is having the extra cash to use for other purchases, maybe for the home. Although, if the price is over the budget that your originally set, then sacrifices would then go into effect. The opportunity cost would be all that is sacrificed to make that purchase of the home you want.
Homes all shapes and sizes will always be in high demand. Since the demand is so high my opportunity cost is either renting a home or going straight forward and buying it. A couple of opportunity costs that could come up would be, buying a new truck, paying for rent against using a lender to get yourself a mortgage. When you compare marginal cost to marginal benefits I can see that buying a home at this particular place in time would not benefit me financially.
Purchasing a new home would be really drastic compared to my monthly rent payment at this time. The lowest price on homes that I would rather stick in price would be $250,000 to $300,000. I would end up paying a larger