Real Estate is the Best Long-Term Investment
Even when inflation is high as it is today, Americans recognize that owning a home is a powerful financial decision.
Inflation reached it highest level in 40 years recently, so it’s more important than ever to understand the financial benefits of homeownership.
Rising inflation means that prices are increasing across the board, including goods, services, housing costs, and more. When you purchase your home, you lock in monthly housing payments, effectively shielding yourself from increases on one of your highest budgetary items each month.
If you rent, you don’t have that same benefit nor are you protected from increases when rents rise. Danielle Hale, Chief Economist at realtor.com, notes:
“Rising rents, which continue to rise at double-digit pace … and the prospect of locking in a monthly housing cost in a market with widespread inflation … are motivating today’s first-time homebuyers.”
Your house is also an asset that typically increases in value over time, especially during inflation. As prices rise, the value of your home does too. Mark Cussen, Financial Writer for Investopedia, states:
“There are many advantages to investing in real estate … it often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because inflation rises, so do property values.”
Since rising home values help increase your equity – and by extension, your net worth – homeownership is historically a good hedge against inflation.
In popular opinion – according a recent Gallup poll - real estate has been rated the best long-term investment for 9 years in a row.
Real estate is the clear favorite, gaining consistent favor over stocks and mutual funds, gold, savings accounts and CDs, bonds.
As mentioned earlier, owning real estate is more than just a place to call home. It’s an investment in the future – a stable and secure asset that grows in value over time.
Put simply by many, real estate is an investment that you can also live in. With the emotional sense of home being so important in our world right now, its value goes beyond that which is measured in dollars and cents.
Photo by Ralph (Ravi) Kayden on Unsplash
