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How do you figure? Homes would go down in price, but your mortgage would stay the same. It's kind of like how people finance cars, even though the value of thei
by bko 5y ago
How do you figure? Homes would go down in price, but your mortgage would stay the same. It's kind of like how people finance cars, even though the value of their car is going down while they're paying down the price of a brand new car.
- whimsicalism 5y agoIn a deflationary environment, the real amount oustanding on your mortgage goes up.
- jbay808 5y agoPerhaps, but likewise the home itself is likely to be much cheaper and so a smaller loan is needed, if any.
- whimsicalism 5y agoYou can't just get a smaller loan every year.
- dragonwriter 5y ago> How do you figure? Assuming amortization with fixed nominal payments, the real (adjusted for CPI) price if the payments goes up over time with deflation, because the buying power sacrificed to the payments increases.