{"id":2766,"date":"2022-06-25T15:32:42","date_gmt":"2022-06-25T15:32:42","guid":{"rendered":"https:\/\/phphouses.com\/blog\/?p=2766"},"modified":"2022-06-25T15:32:42","modified_gmt":"2022-06-25T15:32:42","slug":"homeownership-great-hedge-impact-rising-inflation","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/homeownership-great-hedge-impact-rising-inflation\/","title":{"rendered":"Homeownership Is a Great Hedge Against the Impact of Rising Inflation"},"content":{"rendered":"
\"\"

Homeownership Is a Great Hedge Against the Impact of Rising Inflation<\/p><\/div>\n

If you\u2019re following along with the news today, you\u2019ve heard about rising inflation. Today, inflation<\/a> is at a 40-year high<\/a>. According to the National Association of Home Builders<\/em><\/a> (NAHB):<\/p>\n

\u201cConsumer prices accelerated again in May as shelter, energy and food prices continued to surge at the fastest pace in decades. This marked the third straight month for inflation above an 8% rate and was the largest year-over-year gain since December 1981<\/strong>.\u201d<\/em><\/p><\/blockquote>\n

With inflation rising, you\u2019re likely feeling it impact your day-to-day life as prices go up for gas, groceries, and more. These climbing consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they\u2019re still worthwhile.<\/p>\n

If you\u2019ve been thinking about purchasing a home this year, you\u2019re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here\u2019s how homeownership can help you combat the rising costs that come with inflation.<\/p>\n

Homeownership Helps You Stabilize One of Your Biggest Monthly Expenses<\/strong><\/h4>\n

Investopedia<\/em> explains<\/a> that during a period of high inflation, prices rise across the board. That\u2019s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices<\/a> are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership<\/a>.<\/p>\n

Buying a home allows you to stabilize what\u2019s typically your biggest monthly expense: your housing cost. When you have a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankrate<\/em>, says<\/a>:<\/p>\n

\u201cA fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. <\/strong>Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same. That\u2019s certainly not the case if you\u2019re renting.\u201d <\/em><\/p><\/blockquote>\n

So even if other prices increase, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don\u2019t have that same benefit, and you won\u2019t be protected from rising housing costs.<\/p>\n

Investing in an Asset That Historically Outperforms Inflation <\/strong><\/h4>\n

While it\u2019s true rising home prices and higher mortgage rates mean that buying a house today costs more than it did even a few months ago, you still have an opportunity to set yourself up for a long-term win. That\u2019s because, in inflationary times, you want to be invested in an asset that outperforms inflation and typically holds or grows in value.<\/p>\n

The graph below shows how the average home price appreciation outperformed the average inflation rate in most decades going all the way back to the seventies \u2013 making homeownership a historically strong hedge against inflation (see graph below<\/em>):<\/p>\n

\"Graphs\"

Home Price Appreciation vs Inflation Rate<\/p><\/div>\n

\n
\n
\n

So, what does that mean for you? Today, experts forecast<\/a> home prices will only go up from here thanks to the ongoing imbalance of supply and demand. Once you buy a house, any home price appreciation that does occur will grow your equity<\/a> and your net worth<\/a>. And since homes are typically assets that grow in value, you have peace of mind that history shows your investment is a strong one.<\/p>\n

That means, if you\u2019re ready and able, it makes sense to buy today before prices rise further.<\/strong><\/p>\n

Bottom Line<\/strong><\/h3>\n

If you\u2019ve been thinking about buying a home this year, it makes sense to act soon, even with inflation rising. That way you can stabilize your monthly housing cost and invest in an asset that historically outperforms inflation. If you\u2019re ready to get started, let\u2019s connect so you have expert advice on your specific situation when you\u2019re ready to buy a home.<\/p>\n<\/div>\n<\/div>\n<\/article>\n

Contact us:<\/strong>
\nPHP Houses
\n142 W Lakeview Ave
\nUnit 1030
\nLake Mary, FL 32746
\nPh:\u00a0(407) 519-0719<\/span>
\nFax:\u00a0(407) 205-1951<\/span>
\nemail:\u00a0info@phphouses.com<\/p>\n

Let\u2019s Connect:<\/strong>
\nFacebook<\/a>
\nLinkedin<\/a>
\nTwitter<\/a>
\nInstagram<\/a><\/p>\n

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. The author does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. The author will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.<\/em><\/h5>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s how homeownership can help you combat the rising costs that come with inflation. Finish Reading Homeownership Is a Great Hedge Against the Impact of Rising Inflation<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[69],"tags":[38,15,18,27,91,398,158,86,52,203,49,159,42,40,387,90,48,501,28,47,19,17],"_links":{"self":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2766"}],"collection":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/comments?post=2766"}],"version-history":[{"count":1,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2766\/revisions"}],"predecessor-version":[{"id":2769,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2766\/revisions\/2769"}],"wp:attachment":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/media?parent=2766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/categories?post=2766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/tags?post=2766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}