Home prices continue to increase and experts predict that they will go up through 2022 – still, real estate is a roller coaster! As a buyer, what can you do in order to protect yourself from rising prices for goods and services such as food, shelter or entertainment? The answer is housing.
Your monthly mortgage payment will be locked in when you purchase a home. Fixed-rate mortgages ensure that you will pay the same monthly amount no matter what other prices may rise. This provides you with the assurance that your principal housing costs are protected from inflation.
If the price of everything else goes up but your home price stays constant (or decreases), then you are basically being compensated by owning your own property and keeping it in good condition over time.
To put it bluntly, fixed-rate mortgages allow you to pay the least amount for housing.
You don’t get that same benefit if you rent. Also, you won’t be protected against rising housing prices.
Renters are more exposed due to increasing rent prices if their landlords decide not to renew their lease at the end of its term or if there’s an unexpected hike in rates by suppliers like power companies.
Renters also have less chance of boosting their credit worthiness without making major financial investment on top of monthly payments which can be difficult for people with low incomes who often rely on social welfare programs for sustenance.
To make it more compelling to buy, consider the fact that today’s mortgage interest rates in Missouri are remain fairly low, compared to what they’ve been in years past.
Inflation can reduce the value of your dollar, but low mortgage rates will help to offset it. They will increase your purchasing power and allow you to get more home for your cash. They can also reduce your monthly payment. This is especially important when inflation is high as you will want to avoid the effects of inflation.
If you have the money, and you’re worried about inflation, you need to plan where you can place your money so that it does not lose its value. Housing can be viewed as an inflation hedge because of the low interest rates.
A fixed housing cost is the best protection against inflation. And if you’re fortunate enough to live in Missouri, you are in one of the the most affordable homeownership and rental markets.
You shouldn’t let inflation stop your home purchase this year. Don’t know where to start? Talk to a realty professional for expert advice and support throughout the entire homebuying process.