Should You Still Buy a Home with the Latest News About Inflation?

The Federal Reserve is working hard to keep inflation down, but the latest data show inflation is still high, hovering around 8%. The news hit the stock market and ignited the recession debate. You’ve seen the prices of goods and services rise, and you’ve probably felt the effects in your daily life. The pinch it’s causing your wallet and the looming economic uncertainty makes you wonder , “should I still buy a home right now?”

Homeownership has historically been a good hedge against inflation In an inflationary economy, prices rise across the board.

Historically, homeownership has been a good hedge against these rising costs as it allows you to secure the largest monthly payment (the mortgage) for the duration of your loan. James Royal, Senior Wealth Management Reporter at Bankrate, explains:

“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.”

And with rents being as high as they are, the ability to stabilize your monthly payments and protect yourself from future rent hikes may be even more important.

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains what happened to rents in the latest inflation report:

“Inflation refuses to budge. In September, consumer prices rose by 8.2%. Rents rose by 7.2%, the highest pace in 40 years.”

For rentals, monthly payments are determined by the lease and are generally renewed annually. When inflation is high, landlords are more likely to increase payments to offset the effects of inflation. This is why a survey by realtor shows that 72% of his landlords say he plans to raise the rent on one or more properties within the next year. Becoming a homeowner, if you have the will and ability, can provide lasting stability and dependable protection during times of economic uncertainty.

Bottom Line

 The best hedge against inflation is to fix housing costs. When you’re ready to learn more and start your home ownership journey, get connected.

Find out why Kaya Homes is the leader in Long Island real estate and are your go-to realtor in the Lynbrook, Oceanside, Malverne, Hewlett, Valley Stream, Baldwin, East Rockaway, Woodmere, Cedarhurst, Hewlett Harbor, and Freeport area.