Deciding to buy a house is a lifelong goal for many people. Imagine that you are renting a studio apartment and have just discovered you are having a baby. Your present apartment is small and far from schools and local services. You have decided to move. There are many factors that come into play when making such a large and weighty purchase. Examine the decision-making process from the perspective of an economist.
How much of a down payment do you have?
How much can you comfortably afford in mortgage payments?
Be sure to figure in routine maintenance, taxes and utilities. Average total housing costs are usually between 30% and 35% of after tax income.