How Homeownership Can Help Combat The Impact of Inflation

Inflation is one of the popular news subjects these days and is at an all time high. According to a statement by the National Association of Home Builders, “Consumer 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.”

With inflation on the rise many are feeling the effect with things from gas to groceries. For those debating the purchase of a home in the near future it can weigh in on the decision of whether it makes sense to act soon or potentially wait. Everyone’s decision will vary depending on their own situation, but here is how homeownership can help you fight some rising costs. 

Homeownership Helps Control Your Expenses

During times of inflation prices will rise for many things like food, entertainment, other goods and of course housing including both home prices and rental prices. Owning a home will allow you to stabilize one of your largest monthly expenses being your housing cost. When you have a fixed rate mortgage the biggest portion of your housing expense will be maintained. While it is true that other costs like insurance and taxes may creep up over time, you won’t have the same control if you are renting. 

Investing in an Asset That Typically Outperforms Inflation

It may be true that homes today cost more than they did last year, but buying a home still sets you for the long term. This is because you want to be invested in an asset that historically outperforms inflation. Over the past 50 years home price appreciation has outperformed inflation for most years per data from NAR, CoreLogic and the Consumer Price Index.

So ultimately if you are looking to buy a home soon there are things in your favor to set you up for hedging future inflation.