Should You Still Buy a Home with the Latest News About Inflation?
Sean Morrisey October 24, 2022
Sean Morrisey October 24, 2022
While the Federal Reserve is working hard to bring down inflation, the latest data shows the inflation rate is still high, remaining around 8%. This news impacted the stock market and added fuel to the fire for conversations about a recession.
You’re likely feeling the impact in your day-to-day life as you watch the cost of goods and services climb. The pinch it’s creating on your wallet and the looming economic uncertainty may leave you wondering: “should I still buy a home right now?” If that question is top of mind for you, here’s what you need to know.
In an inflationary economy, prices rise across the board. Historically, homeownership is a great hedge against those rising costs because you can lock in what’s likely your largest monthly payment (your mortgage) for the duration of your loan. That helps stabilize some of your monthly expenses. 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.”
When you rent, your monthly payment is determined by your lease, which typically renews on an annual basis. With inflation high, your landlord may be more likely to increase your payments to offset the impact of inflation. That may be part of the reason why a survey from realtor.com shows 72% of landlords said they plan to raise the rent on one or more of their properties in the next year.
Becoming a homeowner, if you’re ready and able to do so, can provide lasting stability and a reliable shelter in times of economic uncertainty.
The best hedge against inflation is a fixed housing cost. If you’re ready to learn more and start your journey to homeownership, contact us today.
Ocean City — Wonderland Pier is on the market. The first $25 million will buy it.
This beautifully maintained and updated 3-bedroom, 2-bathroom condo sits on the 2nd floor.
In February 2025, New Jersey Governor Phil Murphy unveiled a $58.1 billion budget proposal.
The real estate market is experiencing notable shifts influenced by current interest rate trends.
As you’re getting ready to sell your house, one of the first questions you’re probably asking is?
A tax strategy to defer gain when exchanging properties held for investment or use in a trade or business.
A great way to balance those emotions and make sure you’re confident in your decision.
You probably want to know what you can expect from the housing market in 2024.
If you’ve ever dreamed of buying your own place, or selling your current house to upgrade.
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact me today.