If you’re following along with the news today, you’re
probably hearing a lot about record-breaking home prices, rising consumer
costs, supply chain constraints, and more. And if you’re thinking about
purchasing a home this year, all of these inflationary concerns are likely
making you wonder if you should wait to buy. Investopedia explains that during
a period of high inflation, prices rise across the board. And while home prices
aren’t immune from this increase, here’s why inflation shouldn’t stop you from
buying a home in 2022.
Homeownership Offers Stability and Security
Home prices have been increasing for quite some time, and
experts say they’re going to continue to climb throughout 2022. So, as a buyer,
how can you protect yourself from rising costs for things like food, shelter,
entertainment, and other goods and services? The answer lies in housing.
Buying a home allows you to lock in your monthly mortgage
payment for the foreseeable future. That means as other prices rise, your
monthly payment will be consistent thanks to your fixed-rate mortgage. This
gives you the peace of mind that the bulk of your housing costs is shielded
from inflation.
James Royal, Senior Wealth Management Reporter at Bankrate,
says:
“A fixed-rate mortgage allows you to maintain the biggest
portion of housing expenses at the same payment. Sure, property taxes will rise
and other expenses may creep up, but your monthly housing payment remains the
same.”
If you rent, you don’t have that same benefit and you won’t
be protected from rising housing costs. As an added incentive to buy, consider
that today’s mortgage interest rates are lower than they have been in decades.
While inflation decreases what your dollars can buy, low mortgage rates help
counteract it by boosting your purchasing power so you can get more home for
your money. They also help keep your monthly payments down. This is especially important
during an inflationary period because you’ll want to protect yourself from the
impact of inflation as much as possible.
Ali Wolf, Chief Economist at Zonda, explains:
“If you have cash and are expecting inflation, you want
to think through where you can put your money so it does not lose value.
Housing is commonly looked at as a good inflation hedge, especially with
interest rates so low.”
Bottom Line
The best hedge against inflation is a fixed housing cost.
That’s why you shouldn’t let it stop you from buying a home this year. Not sure
where to start? Let’s connect so you have expert advice and help throughout
every step of the homebuying process.
Source: Real Estate with Keeping Current Matters
