3 ms·

Well sure, because they own that house. If housing prices went down 50%, and they still owned that house and still didn't have to pay rent, they'd be in the sam

• matwood 3y ago
  You're talking about a paid off situation which happens to few people until the end. What you mentioned prices what you're really talking about is inflation. Inflation is great for anyone with a large leveraged asset with a fixed payment rate. As long as inflation continues to go up, even slowly, the person with a 30 fixed mortgage wins every year. A concrete example is that my mortgage is 10 years old. When I bought it was a little tight each month and now I don't even think about it. The house next door rents for 2.5x what I pay. In a deflationary situation (possibly even depression) which you're describing, the fixed rate person loses. Rents will drop, salaries will go down, etc... Everyone loses, but those holding leveraged assets will lose the most.