June 28, 2023
Don’t Let Inflation Stop You From Buying A Home!
Does it make sense to buy a home even when inflation is high? Actually, homeownership can help protect you from inflation and save money in the long run.
To understand how this might be possible, consider two things:
NUMBER 1: When other costs go up due to inflation, buying a home helps you keep your monthly housing expense steady.
Not only will buying today help you begin to build equity, but a fixed-rate mortgage can also help stabilize your monthly housing costs for the long term, even if other living expenses continue to rise.
What is a fixed-rate mortgage? A fixed-rate mortgage is a home loan option with a specific interest rate for the entire term of the loan. Essentially, the interest rate on the mortgage is set and cannot change. Compared to the adjustable-rate mortgage of renting, the stability and inability of the monthly costs to change can help you save money in a changing economy.
NUMBER 2: If you keep renting, it’s likely your landlord will increase rent over time.
According to past trends, rent increases with inflation. Since renting uses an adjustable-rate mortgage plan, the renter is completely within their right to increase the monthly payments with the increase of inflation. This is not uncommon; according to a recent survey, 65.1% of landlords say they plan to raise the rent of at least one of their properties within the next 12 months.
When inflation is up, having a stable housing payment can be helpful in the long run. Homeownership, in this way, can help save money and protect from inflation.
Freddie Mac, BLS, U.S. Inflation Calculator, Avail, www.rocketmortgage.com