Published March 21, 2022
Is Inflation Good or Bad for Homeowners?
Inflation isn’t necessarily bad for real estate; here’s why.
If you’ve been paying attention to the news (or the gas pump), you know we’re in a period of high inflation. Our inflation rate is currently about 8%, which is the highest it has been since January of 1982. Usually, inflation has a bad connotation because it makes things cost more, but how does it affect real estate? 1. Inflation isn’t necessarily a bad thing when it comes to real estate. Owning property is a great hedge against inflation because as prices increase, so does the value of your home. 2. Mortgage payments are not tied to inflation. This means you’ll build equity faster.
"As inflation increases, so do home values."
3. Rents rise with inflation. If home prices and building material costs rise along with rent rates, fewer people will be able to buy and more people will choose to rent. Plus, fewer people will be able to afford to buy since prices and building materials will become more expensive. 4. Housing will become an even better investment. If you’ve been watching the stock market, you know things are looking a little rough right now. At the time of this blog post, the NASDAQ is down 17.9% today, and the S&P 500 is down 11.79%. This makes real estate one of the most secure investments you can make right now. Finally, we want to share our dad joke of the day. Remember how you used to go to the gas station and fill your tires with air for free? We figured out why it isn’t free anymore: inflation. If you have any questions about today’s topic or if you just want more dad jokes, please call or email us. We are always willing to help!
