Why Is Real Estate a Great Investment During Times of High Inflation?
Updated: Mar 25, 2022
In an annual Gallup poll, Americans chose real estate as the best long-term investment. And it's not the first time it's 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 (see graph below):
If you're thinking about purchasing a home this year, this poll should reassure you. Even when inflation is rising like it is today, Americans agree an investment like real estate truly shines.
Why Is Real Estate a Great Investment During Times of High Inflation?
A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. 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 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.
Contact the Loan On Time, your California Real Estate connection, for assistance buying or selling a home in the Gold Country. 888-220-6680 or visit www.loanontime.com for all your mortgage needs!