Quote:
Originally Posted by blankall
Currently, I'd agree that no one is in all that great of a position.
However, for people looking to buy houses, the prices are stabilizing and will fall. However, the cost to get a mortgage is increasing dramatically. Savers will be able to save and gain some profits on saving. Even if overall value, accounting for inflation, is falling, relative to housing it's increasing.
But even in your scenario, the smart thing to do might be to just buy a house outright, once prices have hit the bottom, which will still be too high for most people with a mortgage. Once again, those with capital are benefiting.
|
The people who are benefitting are those who have lots of fixed rate debt. It doesn't seem like a big deal with $100 and $102, but if you owe $600,000 at a fixed rate and the money you pay back with is only worth the equivalent of $500k when you pay it back that's a pretty significant gain.