Michelle Corniciuc |
A New House
It is always a better idea to purchase your own home rather than pay for someone else’s with your rent payments. Owning an asset in the long run is better than a lease. There are many variables to consider before making your final decision. We as Americans find home ownership to be a valuable goal. Even this year’s national elections are using real estate as one of the most important issues. So, the decision to purchase a home is based on our country’s economy as well as your own. Of course the location of the real estate is a factor as well as the size of the lot and the condition of the building. What would you be ...view middle of the document...
So, in looking at your own economy you can see how much purchasing power you have and how steady your job is. Look at another benefit that you could take advantage of. There is a tax deduction on the mortgage interest rate. All of these issues are pointing to the positive decision in home ownership. If you are looking at the larger economy of our country it might be easier to see the negative side. If the GDP is not experiencing steady growth it will have a negative effect on us as consumers. It is for this reason that the housing market is not doing well at this point in time. This is the reason for a well thought out plan for your purchase, but, also points to the fact that since the housing market is not doing well it is a buyers’ market and would be a good time to get in on it while you can. All of the signs so far say that buying a home is a positive, strong, idea.
Now, you still need to consider some more of the governmental issues. Such as the government bodies that conduct fiscal policy. According to “investopedia” (2009), “fiscal policy is the means by which a government adjusts its levels of spending in order to monitor and influence a nation's economy. It is the sister strategy to monetary policy with which a central bank influences a nation's money supply. These two policies are used in various combinations in an effort to direct a country's economic goals. Here we take a look at how fiscal policy works, how it must be monitored and how its implementation may affect different people in an economy”. The Federal Reserve seems to be at the top of the food chain in that they are responsible for setting the rise and fall of interest rates. I believe they also have the some of the control over the possible removal of the tax deduction on the mortgage interest rate. This would affect the housing market by making consumers reconsider the benefits of purchasing a home. This reduces the demand which in turn reduces housing prices. If you take a look at the housing market in countries that have never had this tax deduction in their own system, it may not hurt us too bad and may help our country’s economy. In November 2010 the Fed launched a quantitive easing program which brought the housing prices up, but inflation followed along with it. They are supposed to be delivering an additional quantitive easing over the next three months that they have added some twists to in order to slow the increase of inflation. The Federal Reserve believes with no real fiscal policies coming from Capitol Hill to help the housing market, their monetary policy is the only game in town. (Jenkins, 2012). In 2009 The Department of Treasury introduced a refinance program. This was to give some relief to people who already owned homes and help them not to go into foreclosure.
Our country’s economy has an even greater effect on the housing market. Because we have a free or open market, the price of a good including real...