Owning a Home Helps Protect Against Inflation

Owning a Home Helps Protect Against Inflation

You're probably feeling the effects of high inflation every day, as costs for food, gas, and other items have risen. If you're a tenant, you're probably feeling it a lot more as your rent continues to rise. With all of those increased costs and worry about a potential recession, you may be thinking if it is still a good time to buy a home. The short answer is, yes. This is why.

Homeownership protects you from the rising costs of inflation.

Freddie Mac explains how:

“Not only will buying today help you begin to build equity, a fixed-rate mortgage can stabilize your monthly housing costs for the long-term even while other life expenses continue to rise – as has been the case the past few years.”

In contrast to rising rents, a fixed-rate mortgage payment stays consistent over the duration of the loan (usually 15 to 30 years). And, at a time when the cost of almost everything else is rising, keeping your house payment stable is critical.

The alternative to homeownership is renting – and rents tend to move alongside inflation. That means as inflation goes up, your monthly rent payments tend to go up, too (see graph below):


A fixed-rate mortgage protects you against potential rent increases. With inflation continuing high, your property manager may opt to increase your payments to mitigate the impact of inflation when your rental agreement is up for renewal. Perhaps this is why, according to a recent survey, 73% of property managers intend to hike rents in the next two years.

In a time of economic instability, having your largest monthly payment remain steady is a significant benefit of homeownership. If you continue to rent, you will not have that benefit and will be less insulated from growing costs.

In times of strong inflation, a stable home payment is extremely vital. Contact a real estate agent to learn more and begin your journey to homeownership today.

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