Should You Still Buy a Home with the Latest News About Inflation?

<article class="post-500050 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-500050"><span class="entry-date">October 19, 2022</span><div class="entry-header center-block text-center"><h1 class="entry-title">Should You Still Buy a Home with the Latest News About Inflation?</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Should+You+Still+Buy+a+Home+with+the+Latest+News+About+Inflation%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fshould-you-still-buy-a-home-with-the-latest-news-about-inflation%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="Should You Still Buy a Home with the Latest News About Inflation? | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/18114024/20221019-KCM-Share-2-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/18114024/20221019-KCM-Share-2-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/18114024/20221019-KCM-Share-2.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>While the <em>Federal Reserve</em> is working hard to <a href="https://www.simplifyingthemarket.com/2022/09/27/how-an-expert-can-help-you-understand-inflation-mortgage-rates/?a=712984-fa409495d5d70154d03a25e81e9540e2">bring down inflation</a>, the latest data shows the <a href="https://www.bls.gov/news.release/cpi.nr0.htm">inflation rate</a> is still high, remaining around 8%. This news impacted the stock market and added fuel to the fire for conversations about a recession.<span id="more-47321"></span></p>
<p>You’re likely feeling the impact in your day-to-day life as you watch the cost of goods and services climb. The <a href="https://www.simplifyingthemarket.com/2022/09/13/three-things-buyers-can-do-in-todays-housing-market/?a=712984-fa409495d5d70154d03a25e81e9540e2">pinch</a> it’s creating on your wallet and the looming economic uncertainty may leave you wondering: <em>“should I still </em><a href="https://www.simplifyingthemarket.com/2022/10/05/the-long-term-benefit-of-homeownership/?a=712984-fa409495d5d70154d03a25e81e9540e2"><em>buy a home</em></a><em> right now?”</em> If that question is top of mind for you, here’s what you need to know.</p>
<h4><strong>Homeownership Is Historically a Great Hedge Against Inflation </strong></h4>
<p>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 <em>Bankrate</em>, <a href="https://www.bankrate.com/investing/inflation-hedges-to-protect-against-rising-prices/">explains</a>:</p>
<blockquote>
<p><em>“<strong>A 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.”</em></p>
</blockquote>
<p>And with <a href="https://www.simplifyingthemarket.com/2022/09/30/why-buying-a-home-may-make-more-sense-than-renting-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">rents</a> 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 <em>National Association of Realtors</em> (NAR), <a href="https://www.nar.realtor/blogs/economists-outlook/instant-reaction-inflation-october-13-2022">explains</a> what happened to rents in the latest inflation report:</p>
<blockquote>
<p><em>“Inflation refuses to budge. In September, consumer prices rose by 8.2%. <strong>Rents rose by 7.2%, the highest pace in 40 years</strong>.”</em></p>
</blockquote>
<p>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 <a href="https://www.realtor.com/research/july-2022-rent/">survey</a> from <em>realtor.com</em> shows <strong>72% of landlords said they plan to raise the rent on one or more of their properties in the next year</strong>.</p>
<p>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.</p>
<h3><strong>Bottom Line</strong></h3>
<p>The best hedge against inflation is a fixed housing cost. If you’re ready to learn more and start your journey to homeownership, let’s connect.</p>
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