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Sure, until you find yourself in a deflationary spiral and the economy screeches to a halt. Why would you buy a house if you know that next year it will be chea

• gozur88 10y ago
  >Sure, until you find yourself in a deflationary spiral and the economy screeches to a halt. That's the thought experiment, but it doesn't pan out in reality. The US economy experienced long stretches of high growth and low deflation in the 19th century. People still have physical needs even if the currency is deflating.
• nradov 10y ago
  Computers, cell phones, and other consumer electronics get cheaper every year for a given level of features and performance. Yet consumers still buy more and more of them. Certainly I would buy a house if I know that next year it will be cheaper. I need somewhere to live and don't want to have to move over and over again. Nothing about a deflationary environment would prevent lenders from providing mortgage financing. Mortgages were obviously still available to qualified borrowers during the worst of the housing market crash.
• x0x0 10y ago
  You get to live in the house. We'd be better off if houses weren't treated as investments but rather as shelter; see eg SF/peninsula for what happens when people start winning the housing lottery. ie everyone who owns a home is a millionaire.
• deleted 10y ago
  [deleted]
• fiatjaf 10y ago
  Right, I prefer to die of hunger because I think the price of food will be low next year. Do you really believe this? People buy expensive electronics every day even though they know all them will be much cheaper after some time. Interest rates can adapt to pricing variations expectations, you know that because it works in inflationary environments.