Logo
Apr 29, 2022

How Homeownership Can Help Shield You from Inflation

Shape of house in red

If you’re following along with the news today, you’ve likely heard about rising inflation. You’re also likely feeling the impact in your day-to-day life as prices go up for gas, groceries, and more. These rising consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile.


If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.


Homeownership Offers Stability and Security

Investopedia explains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership.


Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. If you get a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankratesays:


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.” 


So even if other prices rise, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs.


Use Home Price Appreciation to Your Benefit

While it’s true rising mortgage rates and home prices mean buying a house today costs more than it did a year ago, you still have an opportunity to set yourself up for a long-term win. Buying now lets you lock in at today’s rates and prices before both climb higher.


In inflationary times, it’s especially important to invest your money in an asset that traditionally holds or grows in value. The graph below shows how home price appreciation outperformed inflation in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below):

So, what does that mean for you? Today, experts say home prices will only go up from here thanks to the ongoing imbalance in supply and demand. Once you buy a house, any home price appreciation that does occur will be good for your equity and your net worth. And since homes are typically assets that grow in value (even in inflationary times), you have peace of mind that history shows your investment is a strong one.


Bottom Line

If you’re ready to buy a home, it may make sense to move forward with your plans despite rising inflation. If you want expert advice on your specific situation and how to time your purchase, let’s connect.

You may be interested in:

a boy is sitting on a man 's shoulders looking at a house.
19 Mar, 2024
As the spring market approaches, prospective home sellers are gearing up to showcase their properties in the best possible light. One of the most crucial aspects of attracting potential buyers is curb appeal – the first impression your home makes from the street. Here's your comprehensive guide to preparing your home for the spring market and maximizing its curb appeal:
a little girl in a floral dress is running through a sprinkler.
19 Mar, 2024
Testing a sprinkler system is crucial to ensure proper functionality and efficient irrigation for your lawn and garden. Here's a step-by-step guide on how to test your sprinkler system:
a woman is holding a piggy bank and a sign that says buy rent .
19 Mar, 2024
Stepping into the world of renting your first apartment is an exciting milestone, but it can also be daunting, especially when it comes to figuring out your budget. As a prospective renter who's new to living on your own, establishing a realistic budget is essential for ensuring financial stability and peace of mind. Here's a beginner's guide to help you navigate the process:
a beagle dog is running in the grass with a stick in its mouth .
01 Mar, 2024
Following an annual maintenance routine helps homeowners avoid costly repairs, property damage, and keeps home a happy, healthy, and safe place for family and visitors alike.
a man is piggybacking a woman in a cardboard box
01 Mar, 2024
If you’re in the market for a new home, avoid these 4 homebuying mistakes to optimize your experience and set yourself up for success. How do you know if you’re ready to buy? Ask yourself these questions to find out if you’re ready to be a homeowner.
a man in a suit holds a clipboard while standing next to a woman
01 Mar, 2024
No matter what stage of life you’re in, buying or selling a home is a big decision. When you’ve made big decisions in the past, what have you done? You’ve probably done some research on your own, and then asked for advice and guidance from someone you consider to be extremely knowledgeable. Big decisions lead to big changes and moving is no exception. There are a lot of factors at play when deciding on new living arrangements. You need insights from experts to help you feel confident and make the right choice.
a vase of flowers sits next to a sign that says home
21 Feb, 2024
Whether you’re an avid believer in the prediction of our local groundhog, or just eager to feel the warm sunshine again, you may be dreaming of springtime coming early. While we can’t guarantee it’ll be here quickly, we can all prepare to welcome the warm weather into our lives by preparing our homes with the following items.
a flyer about the benefits of homeownership in condos and townhomes .
21 Feb, 2024
If you’re in the market for a new home, but are having time finding something in your budget, be sure to consider condos and townhomes.
a close up of a computer screen showing a graph
21 Feb, 2024
Are you feeling a bit unsure about what’s really happening with mortgage rates? That might be because you’ve heard headlines that the rate is coming down, but then you read somewhere else that they’re up again. Understandably, it may leave you scratching your head and wondering what’s true.
Show More
Share by: