New House Readiness

New House Readiness

Name

XECO/212

Owning your own home is a goal most people look forward to. However, the right time to buy a home is a major decision and should be considered with much thought and negotiating. Of course, more space is needed with a growing family. One of the considerations to keep in mind a new home can be costly, but a new baby is very costly as well.

According to the text, "Rational people systematically and purposefully do the best they can to achieve their objectives, given the opportunities they have." An important principal is rational people think at the margin. If a down payment on a house can fit into the budge without a strain, and all other options have been given much consideration, then it is probably a good time to purchase a home.

Buying a home will have its maintenance and upkeep, and will also increase in value over a period of time. It will also incur expenses such as insurance, mortgage, taxes, and, depending on the location; neighborhood services.

Another principle to consider is People Face Trade-offs. According to the text, we have to give up something that we like in order to get something that we like. An apartment might be comfortable, economical, and in a good location to work and the marketplace. However, all of the convenience is a trade off to obtain something better.

In a apartment, you might be accustomed to eating out, or entertaining on a regular basis. Those are just a few of the extra treats considered as a trade off. When buying a new house, you might have to cut back on some of the small treats, and consider the long haul investment.

Reference

Mankiw, N. G. (2007). Principles of economics (4th ed.). Mason, OH: South-Western

Cengage Learning