OPINION
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Feel Good Again About Your Pricey House
In 10 years, you'll be back in the black
By Dustin Lushing
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Posted Aug 17, 08 7:59 PM CDT
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(Newser)
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Bought an expensive house right before the subprime crash? Fret not, writes Chris Ayres in the Los Angeles Times. With 5% inflation, lower interest rates, and a mortgage tax deduction, buyers of pricey houses will be smiling in 10 years. "If you're a boom-time buyer who can still pay the mortgage, you have more than you think to feel happy about," writes Ayres.
"I can tell you're not convinced, so let's do some arithmetic," he writes. Say your house cost $1.2 million 2 years ago, and is now worth two thirds as much. Inflation will devalue your loan by nearly half during the next decade and make your home appreciate—while the loan gives you tax deductions worth up to $200,000. "Feeling better?" asks Ayres. "Thought so."