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If you haven’t read any of the current news headlines you’re probably well aware of record-breaking home prices and rising costs in many other areas. If you’re thinking of purchasing a home this year inflation concerns could have you wondering if you should wait to purchase a home until things settle down.
Even though home prices are not immune to the inflation happening across the board in America, you should not let it deter you from a home purchase in 2022. Here’s why:
Homeownership offers stability and security
Home prices have been increasing for more than the last two years since the pandemic began. Experts are predicting that home prices will continue to increase throughout the rest of the year. But how can someone make sure that they are financially in a good place to take on rising costs of items like food, shelter, entertainment, and other goods and services?
Interestingly enough the answer lies in the housing market
Purchasing a home allows the buyer to lock in a never-changing mortgage payment with a fixed-rate mortgage for the foreseeable future. This means that as prices rise all around, your monthly mortgage payment will be consistent and stay the same. This cannot be said of continuing to rent a home. Your rent price could go up at any time. Walking into a fixed-rate mortgage gives you the peace of mind that the largest cost of housing is shielded from inflation.
Though mortgage rates are on the rise, and there are several article headlines sensationalizing the increase in mortgage rates, they still remain historically low and much lower than they were just before the pandemic began. A low mortgage rate helps to keep your monthly payments down and can save you hundreds of dollars by just an adjustment of a few hundredths of a point.
Home investment is still one of the most sound investments
If you have a significant amount of cash that you are hoping to invest so that cash can make you more money than it would just sitting in a bank, real estate is still one of the most sound areas in which to invest your money.
Ali Wolf, the chief economist at Zona, has advised that when you have cash and are expecting inflation to continue to rise for the not-so-distant future you want to think through where you can put your money to make sure that it does not lose value. The real estate market is most commonly looked at as a good inflation hedge, especially when interest rates are still very low according to Ali.
When it boils down to it, the best defense against inflation as far as housing costs go, is to lock in a fixed housing cost. So don’t let inflation scare you out of purchasing a home this year if you were planning to. The best thing you can do for your housing costs is to ensure that they remain the same relatively low price for many years to come.
For more information on purchasing a home along the Forgotten Coast, please contact us anytime.
More advice for Home Buying:
How to Avoid Home Buyer Remorse
5 Underestimated Expenses of Homeownership
