Are you feeling the effects of soaring inflation in your everyday life? From groceries to gasoline, prices seem to be climbing higher. If you're renting, you're probably feeling the pinch even more as your monthly rent continues to rise. Given these escalating costs and concerns about a potential recession, you might be wondering if it's still a good idea to buy a home right now. The short answer is – it is. Here’s why.
Homeownership actually shields you from the rising costs inflation brings.
Freddie Mac explains how:
“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.”
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). And, 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 alongside inflation. That means as inflation goes up, your monthly rent payments tend to go up, too (see graph below):
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 or landlord may decide to increase your payments to offset the impact of inflation. That could be why, according to a recent survey, 73% of property managers plan to raise rents over the next two years.
One of the major benefits of homeownership in times of economic uncertainty is having a stable housing payment—the largest monthly expense for most people. By continuing to rent, you lose this advantage and leave yourself vulnerable to escalating costs.
The Mullin Message
A stable housing payment is especially important in times of high inflation. We'd love to connect with you so that you can learn more about the advantages of homeownership and start your journey towards becoming a homeowner today. Take our housing goals assessment today to start planning the right strategy for your future, we're here to help.
Commentaires