Future: Higher inflation and interest rates

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It seems pretty obvious we're going to see much higher inflation and interest rates in the next couple of years and for years to come after that. Given this fact would it wise to stretch myself a little further (buy a bigger more expensive house) than I otherwise would when I buy my next house which will be very soon? I'm going with a traditional 30 year loan.

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This is EXACTLY what the fed wants you to do. Consume, consume, consume.

So rates are going up right? They really have no where to go but up, especially as the fed tries to push the yield curve down. They eventually will go up. With that said, when rates do go up, house prices will probably slide a little further. People base what they buy off their monthly payment, not total price. So higher rates=lower prices.

With that said, if inflation really does go crazy then having your money tied up in a house is a net good thing, as your house will rise with inflation.

Of course, for inflation to catch hold, you are going to have to see a wage/price spiral. If wages don't increase, then inflation will be tamed quickly. And with wage arbitrage, and high unemployment along with globalization, you may never get the wage/price spiral.

Add on to the fact that this deflationary period is going to go on for some unknown amount of time. Basically what I am saying is that anyone who says they know has no fricking clue.

My general thesis is you shouldn't borrow more than you can afford.

I am about to build a house that will be pushing me but Now is the time to do it. Once I factor in pay raises and stuff, It should be no problem to pay for it.

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I am about to build a house that will be pushing me but Now is the time to do it. Once I factor in pay raises and stuff, It should be no problem to pay for it.

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That's a gamble I wouldn't go with right now. Build something you can easily afford but can also easily expand on if you get those raises.