BTCandT on Nostr: The “increase” in your home value is actually just inflation. When you hear that ...

The “increase” in your home value is actually just inflation.

When you hear that home values are rising, it's often celebrated as a sign of economic growth. But what if I told you that this could just be inflation in disguise?

Nominal vs. Real Value: If your home's value goes up from $200,000 to $220,000 in a year, that's a nominal increase. But if inflation is at 5%, your home's “real” value might not have increased at all.

Cost of Living: As the cost of everything else goes up (food, gas, services), so does the cost of housing. This is often just inflation catching up, not an actual increase in wealth.

Interest Rates: If inflation is high, interest rates might also increase, meaning that while your home's value might be higher, the cost to borrow against that value (mortgages, HELOCs) goes up too.

So… If all prices are rising, including homes, are we really richer, or is it just that everything is more expensive?

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