At this hour when prices seem to be skyrocketing out there all over the map, it’s a great time to look at why owning a home offers a shield against inflation.
The following is what four economic experts have to say on this topic.
“Real Estate is one of the time-honored hedges inflation hedges. It’s a tangible asset, and those tend to hold their value when inflation reigns, unlike paper assets. More specifically, as prices rise, so do property values.”
Mark P. Cussen, Financial Writer, Investopedia
“A fixed rate mortgage allows you to maintain the biggest portion of your housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your housing payment remains the same. That’s certainly not the case if you are renting.”
James Royal, Senior Wealth Management Reporter, Bankrate
“Homeowners are shielded from mounting rental prices because their cost is fixed, regardless of what’s happening in the market … 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.”
Natalie Campisi, Advisory Staff, Forbes
“If you have cash and are expecting inflation, you want to think through where you can put your money so it does not lose its value. Housing is commonly looked at as a good inflation hedge, especially with interest rates so low.”
Ali Wolf, Chief Economist, Zonda
Photo by Mika Baumeister on Unsplash