Homeownership Can Help Fight the Impact of Inflation

July 21, 2022
Share this on:
There is no doubt that inflation is one of the top subjects these days and 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 up many people are feeling the pinch with things from gas to groceries. For anyone thinking of purchasing a home in the near future, it can weigh in on the decision of whether it makes sense to act soon or potentially wait. Everybody’s answer will be different depending on their own situation, but here is how homeownership can help you fight some rising costs.

Homeownership Helps Maintain Your Monthly Expenses

During times of inflation, prices will rise for many items 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 control one of your largest monthly expenses your housing cost. When you have a fixed rate mortgage the most significant portion of your housing expense will be maintained. While it is true other things like insurance rates and taxes may increase over time, you won’t have the same control if you are renting.

Invest in an Asset That Historically Has Outperformed Inflation

While it is true that homes today cost more than they did last year, buying a home still sets you for the long term. That is because you want to be invested in an asset that historically outperforms 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 ultimately if you are looking to buy a home soon there are things in your favor to set you up for hedging future inflation.