Abstract/Details

Life-cycle cost analysis of home-ownership


2009 2009

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Abstract (summary)

A methodology for home-ownership life-cycle cost analysis was developed based on the theories of engineering economics, cost engineering, and cost forecasting. Computer programs were written in Excel and Matlab to analyze the home purchase scenarios. Utilizing the computer programs, a median-priced single-family house for O'ahu, Hawai'i was analyzed for various ownership periods and purchase conditions, such as mortgage rates, discount points, down payment size, and alternative rate of investment return (CD interest rate). Buying versus renting analysis was also included in the purchase evaluation.

Analysis of a purchase example indicated that in order to minimize the equal uniform net final monthly expenses, buyers should explore conditions that reduce opportunity losses and maximizes the economic returns. Some of these conditions are: (i) paying least amount of down payment when CD rates are higher than mortgage rates, (ii) exploring a suitable combination of mortgage rate and discount points that optimizes the economic benefits. The trends of the results are independent of the purchase price of the house, but are dependent on all the other purchase parameters. Purchasing an owner-occupied house may bring some tax return, but benefits are often overemphasized. Similarly, buying a house as an investment alternative was not found to be attractive under certain conditions. In many occasions renting a house could serve the functional purpose and may prove to be economically more attractive than an owner-occupied house. The housing affordability index (HAI) put out by the realtors is found to be more liberal in the absence of comprehensive life-cycle cost consideration of home-ownership.

Indexing (details)


Subject
Finance;
Civil engineering;
Studies;
Home ownership;
Cost analysis
Classification
0508: Finance
0543: Civil engineering
Identifier / keyword
Social sciences; Applied sciences; Cost engineering; Cost forecasting; Cost management; Economic analysis; Homeownership; Investment analysis; Life-cycle cost
Title
Life-cycle cost analysis of home-ownership
Author
Gautam, Kamal Prasad
Number of pages
388
Publication year
2009
Degree date
2009
School code
0085
Source
DAI-B 70/07, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
ISBN
9781109289503
Advisor
Singh, Amarjit
University/institution
University of Hawai'i at Manoa
University location
United States -- Hawaii
Degree
Ph.D.
Source type
Dissertations & Theses
Language
English
Document type
Dissertation/Thesis
Dissertation/thesis number
3367902
ProQuest document ID
304893921
Copyright
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
http://search.proquest.com/docview/304893921
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