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High inflation is good if you've just bought a house though. Yes it's hard to begin with but compound inflation soon erodes the value of the debt.
by benj111 4y ago
High inflation is good if you've just bought a house though.
Yes it's hard to begin with but compound inflation soon erodes the value of the debt.
- cudgy 4y agoThis assumes housing moves with inflation, which will not be the case if real wages to pay high interest mortgages do not rise with inflation or prices for housing drop to compensate, which has already started. Buying at the peak even with low interest rates is not a panacea.
- benj111 4y ago>This assumes housing moves with inflation No it doesn't. When you buy a house your price is locked in. It assumes wages track inflation which is generally the case. I also made no assumption as to whether this is a peak or trough in the housing market. Obviously it's better to buy at the bottom but that requires market timing. But in either scenario, assuming wages track inflation, the value of your mortgage is eroded faster, the higher inflation is.