A Home Is Your Castle Against Rising Inflation

Mortgage rates are up to 5%, and some fear a valuation bubble. Even so, it’s a good time to buy.

Journal Editorial Report: Paul Gigot interviews former Trump economics chief Kevin Hassett. Images: Getty Images Composite: Mark Kelly

Mortgage interest rates have been rising at their fastest pace in years. Last April, the 30-year fixed mortgage rate was 3.2%. Today it’s 5%, the highest in more than a decade. “We’ve never seen a time where mortgage rates have risen as quickly as they have and the market hasn’t cooled off,” real-estate economist Ralph McLaughlintold the Journal. “I don’t expect the market to collapse, by any means, but certainly it’s going to go from a gangbuster market to one that hopefully looks more normal.”

But if you’re holding back from buying a house because of the rise in rates, consider that inflation is up even more. A year ago it was running at 2.6% on a year-over-year basis (March 2020 through March 2021). Today, this retrospective annual inflation measure is 8.5%. We haven’t seen inflation this high since the early 1980s. If inflation continues at this rate, you’re better off borrowing money today at 5% and paying it back a year from now with dollars that have depreciated by 8.5%.

To Read the Full Story

Continue reading your article with
a WSJ membership

Resume Subscription

We are delighted that you'd like to resume your subscription.

You will be charged $ + tax (if applicable) for The Wall Street Journal. You may change your billing preferences at any time in the Customer Center or call . You will be notified in advance of any changes in rate or terms. You may cancel your subscription at anytime by calling .

香蕉视频苹果下载Please click confirm to resume now.