Wednesday, February 23, 2022 / by Laura Larson
In an annual Gallup poll, Americans chose real estate as the best long-term investment. And it’s not the first time real estate has topped the list, either. Real estate has been on a winning streak for the past eight years, consistently gaining traction as the best long-term investment.
Why Is Real Estate a Great Investment During Times of High Inflation?
With inflation reaching its highest level in 40 years, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board. That includes goods, services, housing costs, and more. But when you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increasing house payments. James Royal, Senior Wealth Management Reporter at Bankrate, explains it like this:
“A fixed-rate mortgage allows you to maintain the biggest portion of the housing expenses the same. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”
If you’re a renter, you don’t have that same benefit, and you aren’t protected from increases in your housing costs, especially rising rents.
History Shows During Inflationary Periods, Home Prices Rise as Well
As a homeowner, your house is an asset that typically increases in value over time, even during inflation. That‘s because, as prices rise, the value of your home does too. And that makes buying a home the equivalent of a great hedge during periods of high inflation. Natalie Campisi, Advisor Staff for Forbes, notes:
“Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times.”
Invest in real estate, especially when inflation is high. When you lock in a mortgage payment, you’re shielded from most housing cost increases, and you own a tangible asset that typically gains value over time. If you want to better understand how buying a home could be a great investment for you, call Laura at 703-589-7762 today!