Housing
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- Date Submitted: 08/29/2010 04:01 PM
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CheckPoint: A New House – Economy
In a weak economy nothing moves as fast as it should. People are afraid to make purchases that could put them into deeper debt. In the purchasing of a new home while the economy is very weak, you have a better chance of getting that mortgage at low interest costs, a small down payment and you have the added benefits of tax deductions and/or rebates. The marginal benefits when purchasing that new home is based on family composition, a change in job and your financial status. The marginal costs of purchasing a new home is can you afford it, is the time right in which the housing market is strong and banks are willing to give out loans and is it the right move for you and your family.
When you have a tax deduction, it makes the cost of owning a home lower. If there were no deduction, the demand for homes and therefore the prices would fall. Government spending cannot occur without first taking money from the private sector. Spending and taxes simply reduce the amount of resources you have to spend.
How the government spends money and what taxes they will raise versus what the fiscal government budget is greatly impacts the economy. One such tax (social security) happens to be a big chunk that comes out of our pay. Raising taxes through our paychecks affects the outcome of earnings and if we are able to get a loan. Insurance rates such as home owners and fire helps determine whether or not to buy a house. Buying a new home has more taxes attached to it and no rebates, where as you are purchasing a home for resale, you can get tax deductions, rebates and lower interest rates.
(http://www.policyalmanac.org/economic/budget.shtml)
(http://www.goftp.com/qna/How_do_other_changes_in_government_spending_and_taxes_affect
_your_decision_in_purchasing_a_house-qna163167.html)
In a weak economy nothing moves as fast as it should. People are afraid to make purchases that could put them into deeper debt. In the purchasing of a new home while the economy is very weak, you have a better chance of getting that mortgage at low interest costs, a small down payment and you have the added benefits of tax deductions and/or rebates. The marginal benefits when purchasing that new home is based on family composition, a change in job and your financial status. The marginal costs of purchasing a new home is can you afford it, is the time right in which the housing market is strong and banks are willing to give out loans and is it the right move for you and your family.
When you have a tax deduction, it makes the cost of owning a home lower. If there were no deduction, the demand for homes and therefore the prices would fall. Government spending cannot occur without first taking money from the private sector. Spending and taxes simply reduce the amount of resources you have to spend.
How the government spends money and what taxes they will raise versus what the fiscal government budget is greatly impacts the economy. One such tax (social security) happens to be a big chunk that comes out of our pay. Raising taxes through our paychecks affects the outcome of earnings and if we are able to get a loan. Insurance rates such as home owners and fire helps determine whether or not to buy a house. Buying a new home has more taxes attached to it and no rebates, where as you are purchasing a home for resale, you can get tax deductions, rebates and lower interest rates.
(http://www.policyalmanac.org/economic/budget.shtml)
(http://www.goftp.com/qna/How_do_other_changes_in_government_spending_and_taxes_affect
_your_decision_in_purchasing_a_house-qna163167.html)