Current Ethical Issues - Purchasing a House

Purchasing a house is a huge and important decision. Therefore, people often take a long time to come to a decision. There are many factors which affect the decision to purchase a home and one of them will be the strength of the economy. When the economy is in poor health, people are worried about the stability of their jobs and income, so they may be less likely to purchase the house because they may feel that they would benefit more by saving up their money instead of spending on the new house at that time. On the other hand, people may also see it as a benefit and a good time to purchase a new house since housing prices are low and they can reap a profit in the future should they purchase the house during this period. When the economy is in good health, people are optimistic and enjoy higher incomes making them more willing and able to purchase a new house. In addition, they feel that purchasing a new house will offer benefits such as a more comfortable living environment. However, during periods of economic growth, it is more likely that housing prices will soar; making consumers need to part with more money in order to purchase the house and this will lower their disposable income. The removal of the tax deduction on mortgage interest will reduce demand for houses since consumers do not derive as many benefits from making the purchase as before. Changes in government spending and taxes can affect one's decision to purchase a house as well. For example, an increase in taxes will reduce the disposable income of consumers; they are less able and willing to purchase houses and this will result in a decline in demand for houses.