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Comment by commandlinefan | Hacker News Reader

It also works out _sort of_ well for homeowners - at this rate, my house payment is going to end up being a minor inconvenience instead of my largest fixed payment. Of course, I'll still have to pay property taxes and insurance on the newly inflated value of the house.

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High interest rates tend to depress borrowers’ ability to borrow (being constrained by DTI ratios), so house values tend to fall from interest rate increases in isolation (though rise with general inflation, so the combined effect is harder to predict).

It’s generally good for mortgage borrowers who don’t intend to sell.

the advantage gets priced into desirable markets. If interest rates go up, house prices go down. Why? because people cannot afford to mortgage as much when they pay more interest per dollar borrowed.

inflation (or the expectation for ones income to keep up with inflation) incentivizes spending more on houses (so long as the mortgage APR is below inflation) because the inflation is eating the debt YoY. So you may as well buy a lot of house.

That is until they raise the rates, or your income doesn't rise, etc.

Then see 2008.

> Of course, I'll still have to pay property taxes and insurance on the newly inflated value of the house

Luckily mortgage payments are the larger than that chunk :D

For now, anyway. My property taxes are currently just over 50% of my mortgage payment, and I expect them to go up 10% (maximum allowed by law) again next year.

About 45% of my housing expenses is expected maintenance, taxes, and HOA dues, all of which I expect to track inflation.

as long as your income rises that will be true

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