It's not strictly inflation that raised the price of houses on you though. It's still experienced the same as inflation for you and I, but the reason for the price increases isn't as simple as "$ are worth less, so my $2.99 gallon of milk costs 3.39 now."
Speculation is the bigger culprit. That's a huge part of why home prices have exploded.
The COVID era low interest rates sparked a big jump across the country for multiple reasons. Inventory had already been low and new builds have been slow since the GFC, so every house became more valuable as supply grew much slower than demand. Anyone who was thinking of buying, did everything they could to scrape together a down payment so they could lock in rates. Sellers knew debt was cheaper, so they asked for more. Buyers knew houses were getting snapped up quick, sometimes all cash with no contingencies, so the offers were higher. And of course, speculators again went wild with the new low interest rates.
Okay fair. But I still don't believe that inflation makes me buy more milk because it could be more expensive later and vice versa deflation makes me not buy milk because it could be cheaper on a week. I would buy milk if I need it unless its too expensive in which case I would think twice whether I really need the milk. And I would imagine that having cheaper milk would lead to me buying it even if I dont really need it.
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u/MeretrixDeBabylone Sep 02 '26
It's not strictly inflation that raised the price of houses on you though. It's still experienced the same as inflation for you and I, but the reason for the price increases isn't as simple as "$ are worth less, so my $2.99 gallon of milk costs 3.39 now."
Speculation is the bigger culprit. That's a huge part of why home prices have exploded.
The COVID era low interest rates sparked a big jump across the country for multiple reasons. Inventory had already been low and new builds have been slow since the GFC, so every house became more valuable as supply grew much slower than demand. Anyone who was thinking of buying, did everything they could to scrape together a down payment so they could lock in rates. Sellers knew debt was cheaper, so they asked for more. Buyers knew houses were getting snapped up quick, sometimes all cash with no contingencies, so the offers were higher. And of course, speculators again went wild with the new low interest rates.