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Effect of High-Inflation on Housing

The news is full of stories about rising prices affecting your wallet. Naturally, if you’re considering purchasing a home this year, inflationary concerns like increasing consumer costs and supply chain “woes” make you wonder if you should wait to buy. Investopedia explains that prices rise across the board during high inflation. Understandably, the cost of homes isn’t resistant to this increase, but read on to learn why inflation shouldn’t stop you from buying a home in the future. 

Homeownership Offers Stability and Security

Home prices have been increasing for several years, and market analysts say they will continue to climb throughout the following year. Protecting yourself from the rising costs of food, shelter, entertainment, and other goods and services is essential as a buyer. The answer to hedge against inflation lies in housing.

Buying a home and securing a fixed-rate mortgage allows you to lock in your monthly mortgage payment for years. That means, as other prices rise, your fixed-rate mortgage monthly payment will be consistent and locked. With the bulk of your payment locked, you have the peace of mind that most of your housing costs, including the mortgage payment portion, are protected from inflation.

James Royal, Senior Wealth Management Reporter at Bankrate, says:

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”

If you rent, your payments are not locked in, and your rent will likely increase. While inflation decreases the amount that your dollars can buy, low mortgage rates help balance the financial picture by boosting your purchasing power, enabling you to get more home for your money. Low interest rates keep your monthly payments down. (Mortgage Calculator)  

Bottom Line

The best hedge against high inflation is securing fixed housing. Ultimately, don’t let inflation scare you from buying a home this year. If you have any questions, don’t hesitate to contact me. I would love to talk about strategy and real estate!

About Trent

Trent Beaver grew up in Parker, Arizona; a small-town along the Colorado river. Growing up in the small town atmosphere Trent soon learned two key traits growing up, honesty and loyalty. Trent Beaver observed first hand that for any long term success, these qualities are a priority. Trent uses these two attributes for the basis of his business as a REALTOR ®.

As a REALTOR ® Trent puts his client first by being a good listener, good communicator, and responding to your needs quickly. He upholds his core values and looks to be your lifetime REALTOR ® finding you the home or property that suits your needs best.

In 2006, Trent Beaver moved to Prescott to further his education. He soon graduated from Yavapai College with his Associates of Business and from Old Dominion University with his Bachelor’s Degree in Business Administration. Upon purchasing a house with his wife, Jenni, who is a 3rd grade teacher in the Prescott School District, Trent Beaver soon realized his passion for real estate and began to fulfill the requirements to get his real estate license.

When Trent Beaver isn’t working at the BloomTree Realty Office, he enjoys traveling, Off-Road Racing, Golfing, and playing with his dogs: Scout and Piper.

Trent Beaver

(928) 916-1921