Homeownership Is a Great Way to Combat Rising Inflation
Chances are, you're well aware that inflation is rising at an unprecedented rate. In fact, it's reached a 40-year high. Inflation has seen consistent rates above 8% in recent months. Not since 1981 has there been such a yearly gain. Not coincidentally, stories of rising prices dominate recent news reports.
Everything from the groceries you buy and the gas you put in your car has seen a noticeable uptick in cost. It's natural that you may be reconsidering any large purchases or major financial investments at this time. Spending a significant amount of money seems risky when you're already feeling an economic pinch.
Buying a home may be one of those investments you're now on the fence about. You might be thinking that the best financial decision would be to wait. Ultimately, the answer is dependent on your specific circumstances. However, there are lots of good reasons that homeownership is a wise investment during periods of high inflation.
When inflation steadily rises, so do prices on day-to-day goods and services. The housing market isn't immune. Home prices are higher than they were at this time last year. Rental rates are also seeing significant increases. The difference is that owning a home can actually serve as a buffer from the climbing costs of everyday expenses.
A fixed-rate mortgage, typically 15 or 30-year, offers a distinct advantage to renting. When you buy a home at a fixed-rate, the amount you'll pay each month remains steady, despite rising inflation costs or other factors. Rental rates are subject to general market conditions. They'll rise with inflation. Property taxes may vary with the times and you're sure to encounter related costs, but being able to depend on a consistent amount for the majority of your housing expenses can provide you with great stability.
Mortgage rates are higher right now than they were just months ago, and home prices are also surging. This is true, but home ownership remains a strong investment to offset other unpredictable life expenses. Buying a house can be a strategic move right now. The reason for this is that housing is an asset with a historical pattern of outperforming rising inflation.
Real estate and economic experts are predicting that we'll continue to see an increase in housing prices. In addition to the effects of inflation, a high buyer demand in comparison to available home inventory is contributing to the escalation. Buying a home now will allow you to begin gaining equity and growing your net worth, further insulating you from the effects of inflation.
You can typically count on a home's rise in value, making it a strong asset. With costs on the rise, it could make sense to begin perusing homes for sale in Long Beach now, rather than later. A knowledgeable real estate professional can help you navigate the real estate marketing and provide advice based on your unique needs.