I'm sure economists could discuss the eroding purchasing power of a dollar in many different ways. All I know is, if a home buyer locked in a fixed-rate mortgage in year 2000 and keeps that mortgage for 15 or 30 years, the number of dollars he pays out every month for principal and interest remains constant, no matter what happens to prices for food, gas, computers, phone service, cable TV, rents, clothing, college tuition, property tax, insurance, etc. etc. The house dollars are the only ones he can control.
If the value of dollars I paid out for my home have eroded along the way, I sure haven't noticed. It's my distinct impression that they couldn't have eroded as much as the price of everything else has gone higher and higher.
The fastest way I know of to make a dollar erode is to spend it on rent. Poof! Dollar gone. I hope to see at least some of my housing dollars again someday. I'll have to assess their value at that time, I guess. |
