Inflation has caused prices to rise for groceries, gas, and rent, while also creating uncertainty of a possible recession, making people wonder if it‘s still worthwhile to purchase a home. Despite the current climate, buying a home is still a wise decision. Here is why.
Homeownership actually shields you from the rising costs inflation brings.
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.”
A fixed–rate mortgage offers predictability for your housing payments over a period of 15 to 30 年, enabling you to keep your payments stable even when other costs are on the rise.
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 allows you to protect yourself from future rent hikes. With inflation still high, when your rental agreement comes up for renewal, your property manager may decide to increase your payments to offset the impact of inflation. Maybe that’s why, according to a recent survey, 73% of property managers plan to raise rents over the next two years.
Homeowners gain financial stability by having their largest monthly expense—housing—remain fixed amid economic uncertainty. On the other hand, those who rent do not enjoy this benefit and are vulnerable to rising costs.
A stable housing payment is especially important in times of high inflation. Let’s connect so you can learn more and start your journey to homeownership today.