Cervone Deegan + Associates knows that inflation is one of the top news subjects these days and it is at an all time high. According to a statement by the National Association of Home Builders, “Consumer prices accelerated again in May as shelter, energy and food prices continued to surge at the fastest pace in decades. This marked the third straight month for inflation above an 8% rate and was the largest year-over-year gain since December 1981.”
With inflation on the rise many Americans are feeling the impact with things from gas to groceries. For anyone thinking of buying a home in the near future it can factor in on the decision of whether it makes sense to act soon or potentially wait. Everybody’s answer will vary depending on their own situation, but here is how homeownership can assist you with combatting some rising costs.
Homeownership Helps Manage Your Monthly Expenses
During times of inflation prices will increase for many things like food, entertainment, other goods and of course housing including both home prices and rental prices. When you buy a home it will allow you to stabilize one of your largest monthly expenses being your housing cost. When you have a fixed rate mortgage the most significant portion of your housing expense will be maintained. While other things like insurance and taxes may creep up over time, you won’t have the same control if you are renting.
Investing in an Asset That Typically Outperforms Inflation
Homes today cost more than they did last year but buying a home still sets you for the long term. That is because you want to be invested in an asset that has historically outperformed inflation. Over the last 5 decades home price appreciation has outperformed inflation for most years per data from NAR, CoreLogic and the Consumer Price Index.
So in the end if you are looking to purchase a home soon there are things in your favor to set you up for hedging future inflation.