High inflation has resulted in increased prices for groceries, gas, and other essentials, impacting your daily life. As a renter, rising rents add to the financial burden. Despite elevated costs and recession concerns, buying a home remains a sensible choice. Here’s why. 

Homeownership actually shields you from the rising costs inflation brings.

Freddie Mac explains how: 

“Not only will buying today help you begin to build equity, a fixed-rate mortgage can stabilize your monthly housing costs for the long-term even while other life expenses continue to rise – as has been the case the past few years.”

A fixed-rate mortgage payment offers predictability throughout the mortgage term, typically spanning 15 to 30 years, unlike rents that tend to increase over time. This stability becomes crucial amidst the rising costs of various expenses, making it particularly important to maintain a consistent housing payment.

Renting is the alternative to homeownership, and it is often linked to inflation. As inflation increases, monthly rent payments also tend to rise accordingly. (see graph below):

Opting for a fixed-rate mortgage offers protection against future rent increases. Given the persistent high inflation, there is a possibility that your property manager may raise your rental payments when your lease is up for renewal, aiming to counterbalance the effects of inflation. Maybe that’s why, according to a recent survey, 73% of property managers plan to raise rents over the next two years.

One of the significant advantages of homeownership during economic uncertainty is the stability of your largest monthly expense. By owning a home, you can ensure that this expense remains steady, unlike renting where you lack the same benefit and are more susceptible to escalating costs.

Bottom Line

During periods of high inflation, maintaining a stable housing payment becomes particularly crucial. To explore further and initiate your path to homeownership, let's connect and delve into the details.