Housing And Low Interest Rates Hedge Against Inflation
🤢 Has inflation reared its ugly head in your life lately?
Have you found yourself complaining about the cost of housing, food, fuel, and services? A quick scan of the news and social platforms reveals many stories about rising prices. For example, 2021 marked the highest inflation increase in 40 years caused by the broken supply chains of the pandemic and increased demand for housing, cars, and building materials.
💸 How do investors hedge their portfolios against inflation?
Bankrate has a great article on the five best ways to combat inflation. But, of course, one of the best ways to protect against it is to purchase a home. Even Real Estate Investment Trusts or REITs are a great way for investors to fight inflation.
🏘️ Why is real estate one of the best inflation hedges?
Because it is a tangible asset that tends to hold its value over time. Moreover, the mortgage payments are fixed for the loan duration, whereas rents tend to increase over time. Workers are enjoying strong demand for their labor, and wages are rising, which should keep housing affordable even as home prices appreciate. On top of that, remote-work-enabled migration is also creating opportunities in areas of the country where housing is more affordable.
⏱️ If you have home-buying on your radar, why are you waiting?
I have talked with many buyers wary of losing out in the tight real estate market. It isn't easy to purchase a home in the current market, but buyers are not doing themselves any favors by waiting it out. Home prices have jumped in the last year, making affordability a genuine concern. Experts agree that this is not a bubble, and no one expects prices to drop any time soon. The longer a buyer waits to purchase, the less home they will be able to buy. Homes valued at $400,000 twelve months ago are now selling in the $500,000's.
The housing market is quite competitive for buyers, so the number one thing I have my clients do is prepare for the battle. Check out my post from last year on the best ways to be prepared to buy a home. These steps have helped so many clients win in the competitive environment. If you feel ready to tackle inflation and fight the buyer battle, give me a call. Together we can make your homeownership dreams come true!