Americans across the country are concerned about inflation—and understandably so. If you’ve heard the news, but need a little economics refresher, we’ve got you. Inflation is a fluctuating value. It assigns value to money, causing currency to be worth more or less than it was previously. As of June 2022, inflation was up drastically by 9.1 percent in the past 12 months, as per the Consumer Price Index, or CPI. Though this may seem worrying, there are ways how homeownership can help during rising inflation.
Homes are an appreciating asset.
Some people like to get a return on their money by investing in stocks, bonds, or even a home. Unlike cars or boats, homes tend to grow in value over time. And, unlike renting, your money will be going toward something that you can own.
Another facet of how homeownership can help during rising inflation is the future economic value of your house. If you end up deciding to sell it, your home will likely be worth more during a time when the dollar value is rising. That gives you extra financial capital at your disposal.
Homes mean fewer future moving costs.
Rent prices have also seen a sharp rise in the past few months—and it’s a trend that’s likely to continue. Unfortunately, that can mean some people may have to move again and again as they seek rentals with prices that fit their budgets.
Having to pay to move multiple times can actually eat into your savings, making eventual buying even more difficult.
While it will require a bit of number crunching, you should think about how often you plan to move in the next few years. It can put the costs in starker relief, and it may even give you a good push into home buying.
Fixed-rate mortgages don’t vary from year to year.
Unless you refinance for a better value, fixed-rate mortgages don’t vary from year to year.
That’s a huge advantage over renting—and it means your home will likely get more affordable over time. Just remember that this applies to fixed-rate mortgages only!
Remember: You can always refinance.
Mortgage rates have recently climbed a bit.
While this may keep you from buying for the time being, it may also be helpful to remember that you can eventually refinance when rates are lower. You can also lock in a mortgage rate with your lending company or pay to have it extended.
Talk to your lender—and your Realtor—about options!
If you need one last nudge to explore the market, now you have one: knowing how homeownership can help during rising inflation.
Still have questions? Want to start house-hunting?
We’re here to help! Contact us to find a Realtor. You can also learn more about the market on our blog here.