Over the past couple of months of 2022, the news of rising inflation is fueling
concern across the country. Currently, inflation is at a 40-year high. This is
impacting household budgets, the most as individuals & families try to make ends meet with less buying power. For potential home buyers, rising interest rates may cause worry that you will not be able to afford the home you want.
While these are all valid concerns, however homeownership is one of the best hedges against inflation and may be worth stretching your budget to do.
The biggest advantage of owning a home in an inflationary period is a
fixed-rate mortgage stabilizes your largest household expense. Most
people budget 25-45% of their monthly income for housing. As costs
continue to rise, rental rates will rise right along with them. These costs can
far outpace salaries and increase the burden on families.
The second advantage is that home values historically outperform other
assets in appreciation. Owning a home builds equity for the future that is
based on a tangible asset. Even if the home loses value short-term, some
studies show that over 7-years, homeowners should gain more equity than
other investments.
The bottom line is that if you’ve been thinking about buying a home this
year or in the near future, it makes sense to act, even if interest rates are rising. This allows you to stabilize your monthly housing expense while potentially building equity for the future.
If you’re looking to buy or sell a home in the Twin Cities or the surrounding areas, please feel free to call, text, or email me today.
Shannon Lindstrom, Realtor®, AHWD, GREEN, MRP
RE/MAX Results
Direct: 612-616-9714
Lindstrom_S@msn.com
Shannon@ShannonLindstromRealtor.com
www.ShannonLindstromRealtor.com
www.ShannonLindstrom.info
