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**THE ECONOMICS OF BUYING A HOME**



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This lesson provides an overview of the basics of buying a home for the first time. You may make this decision sooner than they think. Although buying a home is the largest financial decision most people make, two-thirds of American adults do buy a home. In this lesson, you will examine programs that make first-time home-buying more affordable. Then you will examine over time several economic factors that influence the number of homes purchased. Finally, you will use a mortgage calculator to find out how the size of the down payment, length of the loan, and interest rate affect the cost of the loan.

On the Brink: This article on the costs of first-time home buyers appeared in The Wall Street Journal Classroom Edition in February 1999. www.econedlink.org/lessons/docs_lessons/121_nn121_coverstory1.pdf

> www.econedlink.org/lessons/docs_lessons/121_nn121_charts1.pdf > www.econedlink.org/lessons/docs_lessons/121_nn121_mortgage1.pdf > []
 * Economic Factors that Influence Home Sales Charts: These charts include data for the following six economic factors that influence home sales: Median Household Income, Median New-Home Prices, Interest Rates, Affordability Index, New-Home Sales, Demographics.
 * Mortgage Rate Analyze Rate Activity: This is the link to download and/or print the chart that compares the four mortgages in the lesson. Students can fill in the chart by using the mortgage calculator.
 * Mortgage Calculator: This website is where students will find the Mortgage Calculator for the Mortgage Rate Analyze Rate Activity for this lesson. Students will need to plug in the initial principle (mortgage amount), annual interest rate, and term (in years) for each of the four mortgages.