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Housing price and inflation

August 9th, 2011 · No Comments

The United States federal government is in deep debt trouble. How is it going to get out of it? It’s inevitable that it’ll print more money – the US government will not default because it has the ability to print unlimited amount of dollars.

This will result in high inflation and high interest rate.

Is housing price going up or down during inflation? You might argue that during inflationary period prices of products and services will go up.

But, there are also downward pressure on the housing price. High interests make it harder for an average American to afford the monthly mortgage payment. Additionally, the job market is still pretty bad. As long as people are not feeling secure about their employment prospect, they would tend to rent instead of buy.

I could be wrong, but I think the housing price will go down further in the next two years due to higher interest rate and high unemployment. It might eventually increase again due to inflation, but we are not there yet.

Do you agree? I’d love to hear from you.

Tags: Beat Recession

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