5 ms·

I (well, realistically my wife and I) just bought a house and I remember thinking "now would be a good time for a bout of inflation." I'm not quite as certain

I (well, realistically my wife and I) just bought a house and I remember thinking "now would be a good time for a bout of inflation." I'm not quite as certain about that anymore but the rate we got is a fair bit less then 7% so I suppose we're making out on this to some degree. Not on groceries though.

runako 5y ago
It's not (just) about the interest rate on your mortgage, though. The real benefit comes as salaries ratchet up in response to inflation, which will happen as long as the inflation is somewhat persistent. Thinking back to the mid-90s, for example, CS grads from prestigious schools were jockeying to earn $40k-$60k at prestigious tech firms. They were able to purchase houses on those salaries. If someone purchased a house in e.g. San Mateo after a couple of promotions to $75k, they might have spent in the neighborhood of $250k[1]. A few rounds of inflation later, the payments on that mortgage are inconsequential to that person (who may still, in 2022, hold a mortgage there). TL;DR; compensation and inflation are linked. 1 - https://www.latimes.com/archives/la-xpm-1996-12-27-mn-12986-story.html https://www.latimes.com/archives/la-xpm-1996-12-27-mn-12986-...