If you are paying a fixed rate on a mortgage, is inflation then a good thing?
In: Economics
If you look at the mortgage alone, yes. If you consider that inflation increased the value of your home, no. If you buy a house for $500k, and inflation caused it to go to $1M, it looks like you made a $500k profit. Except that $1M cant buy you anything better than what you had.
And congratulations. If you sell the house, for that one year, you are now in the top 1% with an income above 400K. You will be taxed like a rich person in the highest bracket for the brief moment that you are considered rich by the IRS. After a 50% tax on your profits, you will have $750k left over with which you cant afford to rebuy your same house.
Inflation is a hidden tax. If you think far enough, you will realize the cons usually outweigh the benefits.
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