If you are paying a fixed rate on a mortgage, is inflation then a good thing?
In: Economics
Hypothetically, inflation should be a good thing if you have any sort of high value asset that typically appreciates as it will appreciate too. However real estate is typically tied more to interest rates than the overall cost of goods and services. Because interest rates skyrocket in a period of high inflation, this puts pressure on housing and will likely lead to a period of housing deflation while the costs of everything else goes up.
If you have no plans to sell your house, this doesn’t matter. You are in a good position with a low fixed rate. However, if you want to sell, you may even see your house end up underwater depending on when you purchased it.
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