The Case for Buying a Home Right Now

The positive case for buying a home right now: The key factor: Interest rates. If you can borrow at 4.5% or 5% over 30 years, many purchases start to look appealing. Especially if we get a hefty dose of inflation down the line. If that happens, your monthly payments will be low and you'd get to repay the principal over time with devalued dollars. That's a double win. Inflation isn't guaranteed: The bond markets are only predicting about 1.4% inflation over the next 10 years, and BCA Research recently reminded clients that deflation, or falling prices, remains a danger. Unemployment is still rising and recent wages actually fell. Yet if you had to bet from here, you'd bet on inflation in due course. The government is running massive deficits and has the printing presses at full throttle. That's the classic recipe. And inflation is the debtors' friend -- which is why it is surely going to prove the politically expedient way out of this mess. Anyone purchasing hard assets like real estate, with a 5% fixed rate loan, ought to make good money if that happens.

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