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How is that a silver lining, isn't that the worst part of the problem? In a more ideal world, we want mortgages to get more expensive (so that housing itself w
by maxsilver 5y ago
How is that a silver lining, isn't that the worst part of the problem?
In a more ideal world, we want mortgages to get more expensive (so that housing itself would get cheaper).
- Spivak 5y agoSomeone who owns their home by taking out a mortgage (in some sense) loves inflation because they're paying back their loan of, say 2010 dollars in 2020 dollars. Whether the interest rate on the mortgage (the cost of the mortgage) is high or low doesn't matter when it comes to this effect.
- fzzzy 5y agoThey only love it if they get raises.
- Spivak 5y agoPurely from the perspective of their mortgage it is at worst neutral. Sure it sucks that other goods will be increasing in cost relative to the mortgage but even if you got no raises at all over the lifetime of your mortgage and during that period there was positive inflation you are in real terms not paying any more on your mortgage than you were when you got it. * Assuming a fixed interest rate of course. Don't put that evil on anyone.
- gorjusborg 5y agoYes. I am a homeowner and don't want my home value to double when real income has barely moved in the same period. That's not sustainable. Even if I could sell without repurchasing, to pocket the cash, there's another generation behind me that's going to need a place to live. You can't just have entire generations of homeless people without it affecting society.