Buying a house now could be the best hedge against inflation …EVER!

And how about the available inventory of homes?  Today's buyer has so many choices!

Richard, I think a lot of people are finally coming to this realization.  With prices so low and other conditions being right, we see many investors coming back to the market.

You nailed it, Richard. Even though there's talk that home prices could drop a little further, I'm not hearing anyone say interest rates will also continue to fall. So now's the time to buy your dream home at a greatly reduced price and at an interest rate you'll brag about in the near future.

In other locations of the world you commonly have "generational" loans.  Wouldn't it be ugly if folks all of a sudden had to start taking out 50 and 100 year mortgages?

But the reality is that so many more  millions of folks will not be able to endure the inflation as in times past.  They will have some really hard decisions to make. And with a gov't that thinks solutions to problems include greater borrowing and redistributing wealth, they obviously will have a "plan" to help those in need for such a ripe opportunity to enlarge the bureaucracy.

Its shaping up to be a redefining time in the history of our nation and the world, when freedom loving people of sound economic principles reject the authority's bubble & burst, borrow-your-way-to-slavery economic model, and restore sanity to our nation's economy with the constitutional republic we were handed from our fathers.  They warned against the villany we daily face every day in the form of this debt-strapping, materialism vomiting monster known as fractal reserve banking (i.e. legalized stealing).  

Inflation is legalized stealing, because a small group of wealthy individuals control the levers to the value of money by controlling its supply.  Remember that verse where Jesus says "don't lay up treasure on earth, where thieves break in and steal."  Say Grandpa worked hard all his life, and saved a fortune of 100,000 (in his day).  But because of the banksters, his hard earned fortune sitting in savings is stolen from every day thru the magic of inflation.  No need to rob Grandpa, the banksters have already legalized stealing without every touching his stash!

Maybe you realize the Federal Reserve is not working for the people, it is a consortium of private banking interests, and its only obligation -- to improve its own bottom line.  But if you don't, its time to wake up and smell the foul odor, and get a on your muck boots, and start mucking out 2 party clown candidates working for big slick and not freedom. 

Maybe you seem to be sitting pretty for a crisis, but what about your country, your neighbor? 

I agree but you also have to be careful about your income to service the debt and to maintain the house and pay the taxes.  Wages are usually the last item to go up in a hyperinflation scenario.  I would think that you need something like silver or gold on the side in order to make sure that you have something else that goes up in value so that you can pay the mortgage and other expenses even if you don't have a job or you income doesn't go up as fast.

You've definitely hit a chord. It's interesting how difficult it is to buy low and sell high. Now that there is the perfect evironment for buying, with lower prices and historically low interest rates, there are still people waiting in the sidelines. When prices were going up to the stratosphere, you couldn't convince people that it was a great time to sell. There is a lot to following the crowd. I too believe that owning a home is a great hedge for inflation--a comforting one as long as one can afford it.

I preach this everyday. I think this is a great post- people are so concerned about will the home drop $ 10,000 INSTEAD of  WOW I have a 4.5% rate and that's going to look great when rates are over 6.5% in a couple of years.

Richard - Truer words were never spoken or posted.... We've always touted this advice and I couldn't agree more... Buy now.. It's a great time to invest in Real Estate

Thanks, Richard, for stating this so clearly and concisely. Re-blogged!

Richard, our neighbors to the north have been experiencing inflation as their economy breaks free from the doldrums.  There is no reason to believe that our economy will soon follow suit and real estate is and has always been a great hedge against inflation.

I really like the point about the repay.I had a similar conversation only from a slightly different direction yesterday with a person calling about our rental. In a nut shell, with all of the homeowners who have lost their homes coming into the rental market we now have a vacancy rate that is almost nonexistent, we were pretty low before at 3% generally, but place an ad now and get flooded with calls, simple supply and demand - low availability will mean higher rents and soon. 

Great post Richard,  now is the time for sure.  Real Estate has always been the one true worthwhile investment.

Thanks for the good read.

Patricia

I really enjoyed the topic of the post today Richard.  I've re-blogged it.

THanks,

Patricia

I've been preaching this to my investors for years! If you buy four rental properties now, your rent increases as inflation rises, but your mortgage payment won't!

Richard, we keep "hearing" of the possibility of hyperinflation in the years out, but most I talk to still think the government has it all backwards, that with the lack of new jobs, DEFLATION is the thing to worry about. With all the home prices around me plummeting in value with lack of buyers I think deflation is the bigger thing to worry about. Maybe it is only my local economy but that is what I see.

Excellent point, Richard! Yet some buyers seem to be waiting for "better deals", and honestly, I'm not sure what they mean by that....

Richard, I left a previous comment but learned today that the $$$ banks are sitting on is now in excess of two trillion dollars and they are earning virtually nothing from it soooooo...it could mean that more money will finally start flowing to consumers who want to buy!

Richard - Lots of good points here.  I love the idea with paying back with inflated dollars.

Right Spot On... chiming in with Todd at #52... Everything takes time, and time flies... but your cost for a loan stays the same. Well said.

Devil's Advocate for a moment here... 

The Fed has been keeping interest rates extrememly low for a long time.  There are two reasons this worries me...  The first is that if rates rise before the economy is really steaming, it could push real estate prices lower again. 

Second, with rates at almost zero, there isn't significant inflation... that tells me that there might be a danger of deflation.  Paying the loan back with deflated dollars would just not be fun.  Of course, the government doesn't want to pay back its loans with deflated dollars, either... 

Just sayin'

I'm not sold on the direction money value is going to go.