A New House - Economy
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A New House - Economy
The strength of the economy as a whole could affect the marginal benefits and marginal costs associated with a decision to purchase a new home by determining the circulation of money and interest rates on loans. Depending on the economy and other variables the Federal Reserve chooses to release more money in attempts to strengthen or slow down the economy. In turn the interest rates on the funds go up or down making loans easier or harder to obtain loans. The cost to build and purchase a home would then go up or down while adjusting the market value making it cheaper or more expensive to purchase a home and receive a positive resale value.
When purchasing a home the accomplishment of owning your own home isn’t the only incentive, the tax deduction is another incentive. When looking to buy a home there are breaks that can make home buying more affordable and the tax break is one of them. If the tax deductions are removed then the bottom line of purchasing a home is too unattainable financially as well as there is no incentive to purchase. There would be a lot of people choosing to rent instead of purchasing which would affect the economy as a whole. Everyone from the contractor building the houses for purchase to the bank providing the loans would be affected in the end.
When the government spends more money then the taxes are sometimes raised to cover the spending. The more taxes that we have to pay then the less money we have for other things. I personally would rather rent and not have to worry about as much of the financial home owning issues. In turn I would have more money to spend on other things than owning a home.