Inflation - a general and progressive increase in prices; "in inflation everything gets more valuable except money".

That's the definition Google gives, and there is a simple correlation - when the prices of things rise, the prices of homes are included.

Now that the Fed has printed $3trillion, with rates down to about zero, inflation is a concern for many. It's not so much 'if' but 'when' this will happen.  While it hasn't come yet, and in fact we are closer to disinflation right now, the threat of hyper inflation is in the near future.

One of the benefits of inflation will be that home prices will rise, along with everything else. Many economists think inflation is what we need to get us out of the mess we are in. Money will lose value while other things gain value, including stocks, homes, food, everything.

I'm no economist, and I don't pretend to understand how inflation will help us out of the economic mess we are in, but I do know one simple thing. When inflation happens, everything that is a hard asset rises in value, by definition.

In the Great Depression, the government was so concerned about inflation that they stifled the economy by trying too hard to fight it.  Some economists think that it would have been much better to let inflation happen back then, so that the Depression would end sooner. 

This time around, it seems Obama and friends are taking that route - letting inflation save the economy. As prices are now coming down on things, people don't buy as much because the longer you wait, the cheaper things will be. If they can get prices to rise, then people will rush out to buy hard assets.  

Will this work? I have no idea. All I know is that when inflation happens, I'll be glad I own a house in Hawaii.