Optimizing Home Ownership as a Shield Against Inflation
Every day, the rising inflation is palpable as prices of daily necessities like food and fuel surge. If you are a tenant, the effects are probably even more noticeable, with constant hikes in rent. Amid these mounting expenses and looming fears of a potential recession, the question arises - is buying a house a viable option? The unequivocal answer is - absolutely. Here’s the rationale.
Purchasing a home serves as an effective buffer against inflation's soaring costs.
Here’s the reasoning according to Freddie Mac:
"Purchasing a property today does more than just help accumulate equity, it enables a fixed-rate mortgage to set your long-term housing costs in stone, despite other expenses in life escalating – a trend witnessed over the past years.”
Fixed-rate mortgage payments, unlike rents, remain steady throughout the mortgage duration (usually 15 to 30 years). When almost all other costs are skyrocketing, ensuring a steady housing payment becomes significantly crucial.
Renting is the flip side to home ownership, and unfortunately, rents generally rise in tandem with inflation. Consequently, as inflation ascends, monthly rent payments tend to follow suit (refer to the 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 may decide to increase your payments to offset the impact of inflation. Maybe that’s why, according to a recent survey, 73% of property managers plan to raise rents over the next two years.
Having your largest monthly expense remain stable in a time of economic uncertainty is a major perk of homeownership. If you continue to rent, you don’t have that same benefit and aren’t as protected from rising costs.
A stable housing payment is especially important in times of high inflation.
Taking the step towards home ownership, especially in the current inflation-prone economy, could be your best bet for long-term financial stability. It's the key to shield your housing costs from the unpredictability of inflation and to secure your future. As a seasoned Real Estate Broker with Avant One Real Estate in Westlake Village, CA, I, Teri Pacitto, am more than ready to assist you on this journey. Contact me today, and let's explore how buying a home can serve as your personal inflation-proof investment.
Remember, the key terms for today's real estate market are Home Ownership, Inflation-proof Investment, Fixed-rate Mortgage, Housing Costs Stability, and Rent versus Buy. Empower yourself with this knowledge and make a move towards a secure financial future.
Don't let inflation dictate your life. Take control. Own a home.
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