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  • Writer's pictureSang Han

Owning a home is a good anti-inflation measure


I believe we are all experiencing the rapid rise in prices these days. There is nothing that hasn't gone up-- gas, groceries, etc. In the meantime, there is a high probability that a recession will come, so there are many people who are hesitant about whether buying a house now is the right decision.


My conclusion: I think you should buy a house at a time like these days.



First of all, In the current market conditions, the risk of a collapse in house prices, as seen in 2008, is extremely low. So house prices (still in critically short supply) will rise, albeit slowly.


Second, there is something that many people don't think about: the rent rises along with rising prices. If you look at the graph below, you can see how rents have risen in each inflation period.



In other words, when you buy a house, the fixed cost of living each month is fixed for 30 years due to the fixed interest rate. Or you can reduce your fixed costs by re-financing when interest rates go down. In the meantime, part of the monthly payment is used to pay off the principal, so asset growth occurs-- even if it is a small amount. Of course, as the years go by, there will be asset growth as house prices rise.


On the other hand, the rent keeps going up, but what the tenant paid just goes to the landlord. According to a survey by Buildiumstaging.com, 73% of property management companies plan to increase rents in the next two years. It is a situation where the cost of living only increases with no asset growth.

Looking back on these circumstances, I think buying a home is a much more economical decision.



If you have any additional questions about today's article, please feel free to contact us. See you next time with a helpful article.




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