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Why You Should Still Buy a Home During High Interest Rates

Swimming Upstream: Why You Should Still Buy a Home During a Market with High Inflation Rates

The real estate market can be a daunting place, especially during periods of high inflation rates. Inflation erodes purchasing power and raises concerns about the future value of investments. However, buying a home during such times can still be a wise decision for various reasons. In this blog, we will explore the advantages of purchasing a home in a market with high inflation rates and how it can be a strategic move towards long-term financial security.

Hedge Against Inflation

Real estate has historically proven to be a reliable hedge against inflation. During periods of high inflation, the value of tangible assets like real estate tends to rise. As the cost-of-living increases, so does the demand for housing, leading to potential appreciation of property values. By investing in a home, you can protect your wealth from the eroding effects of inflation and secure a tangible asset that is likely to appreciate over time. This appreciation can act as a shield against the rising prices of goods and services, helping to maintain the purchasing power of your investment.

Fixed-Rate Mortgages

One of the key advantages of buying a home during high inflation is the availability of fixed-rate mortgages. Locking in a mortgage with a fixed interest rate allows you to pay a consistent monthly amount, unaffected by inflation rates. As inflation rises, the real value of your mortgage payments decreases, providing you with a financial advantage. Furthermore, while home prices may increase due to inflation, your fixed-rate mortgage ensures you will continue to pay the same amount, making it easier to budget and plan for the future.

Building Equity

Homeownership allows you to build equity over time. As you make mortgage payments, you are essentially paying off a part of the property, thereby increasing your ownership stake. This equity accumulation is an excellent long-term strategy, as it contributes to your net worth and provides financial stability. Inflation may cause the value of your home to rise, accelerating the equity-building process. This equity can also serve as a safety net during tough economic times, allowing you to tap into your home's value through a home equity loan or line of credit if needed.

Rental Market Dynamics

In a high-inflation environment, the rental market can witness significant fluctuations. Rent prices tend to rise as landlords try to keep up with increasing costs. By buying a home, you can escape the uncertainty of rental hikes and gain control over your housing expenses. Furthermore, if you decide to rent out your property, you can potentially benefit from higher rental income during inflationary periods, providing you with an additional stream of passive income.

Tax Advantages

Homeownership offers various tax benefits that can mitigate the impact of inflation on your overall financial situation. Mortgage interest deductions, property tax deductions, and capital gains tax exclusions for primary residences are some of the tax advantages available to homeowners. These incentives can help reduce your tax burden and enhance your overall financial well-being. It's essential to consult with a tax professional to fully understand and maximize these benefits.


Investing in real estate provides diversification in your investment portfolio. While traditional investments like stocks and bonds may be influenced by inflation, real estate often behaves differently. This diversification can help balance your investment risk during times of economic uncertainty. By spreading your investments across different asset classes, you can potentially reduce the overall risk in your portfolio and create a more resilient financial strategy.

Although a market with high inflation rates can be challenging, it also presents unique opportunities for homebuyers. By investing in real estate during such times, you can potentially benefit from appreciation, hedge against inflation, and secure long-term financial stability. Remember, it's essential to conduct thorough research and seek professional advice before making any significant financial decisions. Assess your current financial situation, long-term goals, and local market conditions to determine if buying a home during high inflation is the right choice for you. With careful planning and consideration of the advantages mentioned above, purchasing a home can be a prudent investment strategy even in inflationary times, providing you with a valuable asset that can weather economic storms and offer a foundation for a brighter financial future.

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