Life cycle cost analysis for home purchase

This paper illustrates a comprehensive engineering economic analysis method for purchase of single-family homes. Multiple expense and revenue items over the life cycle of ownership period are analyzed to obtain equal uniform monthly costs. Price escalation rates are derived from regression analysis of historical cost data. The paper seeks to answer the question "what set of conditions will optimize the prospective buyer's net worth?" It is discovered that low down payments; a combination of low mortgage rate and high points; and a medium-range ownership period are important factors for optimizing net worth. Renting vs. buying option is also compared by the same procedure.