[runako]

This ignores the linkage to compensation. Broad inflation leads to people earning more. So if you own your home, you break even on the home (ignoring the downstream effect of having more home equity for your heirs).

But you can reasonably expect to be paid more in 2022/2023 than you would have been in those years had inflation stayed on the 2019 trend line. That will, in turn, make it easier for you to pay your mortgage and increase savings. You essentially get a raise to cover the fact that other peoples' housing costs increased*. That's the crux of the benefit.

* yes, some of your expenses increased as well, but the wage increases you receive need to cover the increase in those expenses PLUS housing expenses because market compensation increases for broad categories of workers, not for your specific household budget. So you still get "for free" the housing-linked part of the inflation adjustments to compensation.

[notch656a]

As the value of your home goes up, your 'rent' goes up in the form of increased property taxes and depreciation becoming more expensive on the improved land and structures residing on top of the land.

This may seem invisible to you now, but as assesors re-assess your house, you realize how much more you are paying in 'rent' (maintenance) on your house for materials like wood and labor, or you're forced to sell at depreciated value because in 50 years you end up the old folks home or whatever -- sooner or later we all pay rent on the property we own. Basically 'using up' your house is getting more expensive in terms of opportunity cost.

[runako]

All of that was going to happen, regardless. The only difference is now compensation will ramp up (COL increases will eventually have to match real inflation) and the (bigger) expense of mortgage interest will be smaller as a proportion of income.

Or are you suggesting that inflation will drive wood etc. to be a relatively larger proportion of a homeowner's future expenses? I would strongly disagree with that thesis.

Re-reading your comment, it looks like you're arguing that increasing home values are bad for homeowners. I also strongly disagree with that.

[notch656a]

>All of that was going to happen, regardless.

And thus you reveal your flippant dismissal of what's happened as things that were going to happen anyway.

> now compensation will ramp up

Like the compensation of people repairing houses, like electricians and plumbers, of those living on fixed incomes (and everyone else)?

>Re-reading your comment, it looks like you're arguing that increasing home values are bad for homeowners.

Lol straw mans all the way up. Pretty clear you're just trying to drive this towards the most disingenuous take possible, so I guess there's not much point in engaging you further.

[runako]

Genuinely not straw manning here. Please let me clarify:

>> And thus you reveal your flippant dismissal of what's happened as things that were going to happen anyway.

Yes, I mean that housing prices are going to increase over time regardless (unless we are in a very new phase for the US). I do expect housing prices to be higher in 2042 than in 2022. So between now and then, assessed values and therefore taxes will increase for each property. As a result, people will earn more, even those people I pay directly for services. That's what I meant was going to happen anyway. This argument is about whether it happens in N years or M years. I believe the argument that it will not happen at all (e.g. persistent deflation) is not popular at the moment.

> Like the compensation of people repairing houses, like electricians and plumbers, of those living on fixed incomes (and everyone else)?

Yes, everyone's compensation ramps up. Most people make more today than their job paid in 1980. This is also true for people who have been on fixed incomes like Social Security that entire time. It is especially true for people I pay directly for their services, like the roofers I hired recently. Yes, I understand that I will pay more for their labor in the future.

I also understand that I am part of "everyone else" and therefore eventually we will reach a new, higher, equilibrium of wages. In the new equilibrium, I expect the relationship between the wages professions earn to broadly be preserved. For example, I do not expect the new equilibrium to result in grocery cashiers earning more than electricians. So I am confident that in the new equilibrium, my expense on electricians will shake out roughly where it did in 2018 or 2019 as a fraction of my budget.

> Basically 'using up' your house is getting more expensive in terms of opportunity cost.

I thought this was obvious, but will spell it out. Yes, the use of my house does get more expensive over time. But precisely because I expect my income to at least keep pace with inflation, I do not expect it to become proportionately more expensive than it was when I signed the mortgage.

Consider a person who bought a house in SF for $250k in 1997. That person could still be paying a mortgage whose absolute level was set in 1997 while earning compensation based on 2021 levels. You are correct that to repair/replace the house, they have to do that using 2022 levels. But the house is not 100% of the property value (this is especially in high-cost markets).

[notch656a]

You have some good points about the benefits of owning a house and the hedges against some of the risks renters take.

My main point was to disprove the statement:

>If you own your house, your cost did not go up.

This is clearly inaccurate, if nothing else by viewing property taxes and expenses to maintain the house: your 'rent' on the house does go up in this market. It may look invisible to you now, but over the years you're going to notice the higher nominal cost of living in your house.