That leaves you with your original $ 7,000 down payment returned to you in cash, and you're even in accounting terms (which means in finance terms you're behind; that $ 7,000 invested at 3 %
historical average rate of inflation would have earned you about $ 800 in those four years, meaning you need to stick around about 5.5 years before you «break even» in TVM terms).
Not exact matches
With the economy either at or beyond full employment and the consumer price index — a measure
of the
inflation in consumer prices — at 2.1 percent, the real 10 - year interest
rate is 0.4 percent, Jones explained, roughly 300 basis points below the
historical average.
World growth will remain low on
average but negative in the UK and Europe; price
inflation will remain sufficiently subdued for a while longer so as to impose no constraint on monetary expansion; central banks will sustain a regime
of negative real interest
rates and rapid monetary expansion; the risk
of a eurozone collapse is off the table for now; finally, stock markets should continue to perform better than expected, even though the four - year old cyclical bull market is long by
historical standards.
By
historical standards, 2 percent is a small pay hike on a nominal basis — although, as noted, it is still ahead
of the current and recent
average inflation rate.
If the interest
rates on your other debt - car or student loan or mortgage - is higher than what you could earn by saving or investing (consider that the
average annual
inflation - adjusted
historical return
of the U.S. stock market is just over 6 %), you'd be wise to pay that down first too.
Nor are they high compared with the
historical rate of inflation - which on a year - over-year basis has
averaged 3.7 percent since 1950.
A thirty year mortgage is a great thing at these
rates (I wish I could get a 50 year mortgage), especially if
inflation returns to its
historical averages of 3 — 4 % or higher, and if you can invest the difference between the monthly payments for the 15 and 30 year mortgage and earn more than 3.88 % on that money you will be much better off than if you'd gotten a 15 year mortgage.
National home prices are right in line — within 2 % — with
inflation adjusted long - run
average levels, which Clear Capital says shows prices have normalized post-bubble and future
rates of growth will look more like
historical rates of growth.