For example, if one had taken one unit of currency to a store in the 1950s, it is probable that it would have been possible to buy a greater number of items than would today, indicating that one would have had a greater purchasing power in the 1950s. Currency can be either a commodity money, like gold or silver, or free-floating market-valued currency like US dollars.
If one's monetary income stays the same, but the price level increases, the purchasing power of that income falls. Inflation does not always imply falling purchasing power of one's money income since it may rise faster than the price level. A higher real income means a higher purchasing power since real income refers to the income adjusted for inflation.
So, by definition the purchasing power of a dollar decreases as the price level rises. To us it also means providing the ability to be able to afford more homes. The economy has not yet provided the increases in incomes and with changing market there is still an opportunity to take as much advantage of as possible of current rates.
With interest rates as low as they are, depending on your needs, a 15 Year Fixed balloon or ARM loan with a 30 Year amortization may be more beneficial to you than a 30 Year Fixed Rate Mortgage...?
A 20 Year Fixed Rate Loan at 4.00% (APR4.130) would be at about$1515.00 @ month. While a 15 Fixed Rate Balloon at 3.75% (APR 4.005) based on a 30 Year Amortization would have a monthly payment on a $250,000 Loan of approximately $1,157.50 @ month where. $357 less a month in payments for 'Other Purchases' or possibly more home.