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May 30, 2023

Owning a Home Helps Protect Against Inflation

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You’re probably feeling the impact of high inflation every day as prices have gone up on groceries, gas, and more. If you’re a renter, you’re likely experiencing it a lot as your rent continues to rise[1].


Between elevated costs and uncertainty about a potential recession, you may be wondering if it still makes sense to buy a home today. The short answer is – it does. Here’s why. 


Homeownership shields you from the rising costs of inflation.

Freddie Mac explains: 

“Not only will buying today help you begin to build equity, a fixed-rate mortgage can stabilize your monthly housing costs for the long-term even while other life expenses continue to rise – as has been the case the past few years.”[2]


Unlike rents, which tend to rise with time, a fixed-rate mortgage payment is predictable over the life of the mortgage (typically 15 to 30 years). When the cost of most everything else is rising, keeping your housing payment stable is especially important.


The alternative to homeownership is renting, and rents tend to move[3] alongside inflation.[4] As inflation goes up, your monthly rent payments tend to go up, too (see graph below):

Rents increase with inflation most years infographic

Rental Agreements are Short-Term

A fixed-rate mortgage allows you to protect yourself from future rent hikes. With inflation still high, when your rental agreement comes up for renewal, your property manager may decide to increase your payments to offset the impact of inflation.


According to a recent property management survey, 73% of property managers plan to raise rents over the next two years.[5]


Housing is like your largest living expense, and stability is important in times of economic uncertainty[6]. This is a major perk of homeownership. If you continue to rent, you may not be protected from rising costs.


Final Thoughts

Homeownership may be more within your grasp than you realize. A stable housing payment is especially important in times of high inflation. Speak with a Realtor® about your homeownership goals and let them be your expert real estate guide.

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