Articles

As our country is facing an increase in debt, we are also seeing a rise in inflation. This increase in inflation is indirectly impacting the real estate market as it affects the pricing of the house. Housing is considered a leveraged asset in regards to a rise in the inflation rate. While down payments range in 20-30% of the price of the house, the price of the house is simultaneously increasing due to inflation. With a fixed-rate mortgage, people are able to make lower payments due to the adjustment of inflation which means you are paying a lesser amount for the loan than you did when it was first taken out. While you can’t predict inflation, you can view the supply and demand in a market to see if it increases or decreases which represents the oversupply or undersupply of houses in the market allowing a better prediction of how prices will be going up or down in the near future. The debt that the country is facing is directly creating higher inflation rates which is indirectly creating higher interest rates from banks.